South African rand edges higher ahead of rate decision

FILE PHOTO: South African Rand coins are seen in this photo illustration taken September 9, 2015. REUTERS/Mike Hutchings

JOHANNESBURG – The South African rand edged higher at the start of a week that will include the central bank’s decision on its interest rates.

At 0614 GMT, the rand traded at 18.975 against the dollar on Monday, 0.14% stronger than its previous close.

The dollar index was trading flat against a basket of currencies.
Local investors will look toward the South African Reserve Bank’s rate announcement on Wednesday after inflation rose to 5.6% in February, nearing the top-end of the central bank’s preferred range of 3% to 6%.

ALSO READ: Weakening Rand detrimental to foreign public debt – Economists

“The focus will be on the … decision and guidance, with expectations leaning towards maintaining current rates but with keen interest on future rate cut projections, influenced by changes in Fed expectations and domestic inflation forecasts,” said Andre Cilliers, currency strategist, TreasuryONE.

The rand came under pressure last week as the dollar gained on global risk aversion.

Positive shifts in economic strategies locally could enhance investor confidence and potentially lead to a recovery in the local currency’s value and overall economic outlook, Cilliers added in a research note.

South Africa’s benchmark 2030 government bond was flat in early deals, with the yield at 10.425%. (Reuters)

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *