South Africa's rand recovered after data showed the economy grew marginally in the fourth quarter, and a purchasing managers' index (PMI) survey revealed that the country's private sector activity expanded for the first time in six months.
At 1538 GMT on Tuesday, the rand traded at 18.9325 against the U.S. dollar, about 0.6% stronger than its previous close.
In the final quarter of 2023, South Africa's economy grew by 0.1%, while for that year as a whole, growth came in at 0.6%, Statistics South Africa said.
The data meant Africa's most industrialised economy narrowly avoided a technical recession, defined as two consecutive quarters of falling economic output, after a contraction of 0.2% in the third quarter.
Cautious optimism
However, analysts remained unimpressed. "The South African economy managed to avoid a recession, but the overall picture has not changed: the economy remains stagnant amid soft domestic demand and numerous supply-side growth impediments," Jee-A van der Linde, senior economist at Oxford Economics, said in a research note.
Separately, S&P Global's whole-economy PMI survey showed South African private sector activity expanded in February for the first time since August as staffing and purchasing levels increased amid stronger confidence.
A manufacturing sector PMI survey last week showed factory activity recovered in February after a steep slump the month before.
A surge in the price of gold, one of South Africa's major exports, could also help boost the rand this week, said analysts at ETM Analytics.
On the stock market, the Top-40 (.JTOPI), opens a new tab index and closes 0.61% lower.
South Africa's benchmark 2030 government bond was slightly stronger, with the yield down 0.5 basis points to 10.095%.
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