South Africa’s Rand Firmer Ahead of Interest Rate Decision

Enterprise Television- South Africa’s Rand Firmer Ahead of Interest Rate Decision

South Africa’s rand gained its stand against a dollar early on Thursday as expectations that the central bank would leave its main lending rate unchanged for a third meeting in a row boosted investor appetite for the local currency.

The rand was up 0.82 per cent at 14.5225 per dollar at 0650 GMT, having closed in New York at 14.6425.

Markets were awaiting the interest rate decision of the South African Reserve Bank (SARB), due at 1300 GMT.

All bar one of the economists polled by Reuters last week see the SARB leaving benchmark rates at 6.5 per cent, with the need to keep inflation in check outweighing weak economic growth and the rand’s recent plunge.

Lower inflation and relatively high lending rates, which have sustained demand by yield-hungry investors despite the poor growth outlook, will likely be helped aided by a rate hold.

In fixed income, the yield on the benchmark government bond due in 2026 was down 3.5 basis points to 9.065 per cent.

Stocks are due open higher at 0700 GMT, with the JSE securities exchange’s Top-40 futures index up 0.34 per cent.

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