The South African (SA) Rand was steady on Friday as investors shifted their focus to next week’s inflation data and monetary policy meeting, where the central bank is widely expected to raise interest rates.
The Rand traded at 16.2450 against the Dollar, little changed from its previous close of 16.2649.
The currency has been supported by stable commodity prices after the United States (US) Federal Reserve raised interest rates and signalled that further monetary tightening may follow.
Traders are now focused on August consumer inflation data due on Wednesday for fresh clues on the SA Reserve Bank’s (SARB) plans on interest rates.
Headline inflation cooled to 4.3% year-on-year in July, the first fall in five months.
SA’s central bank surprised investors and economists by keeping its main lending rate unchanged at its previous meeting, saying its policy was restrictive enough to return inflation to its target within two years.
“The SARB is in a predicament, as to whether to increase rates or not. A hike would attract yield investors, but would mean a curtailing of domestic activity,” said Adam Phillips of Umkhulu Treasury.
SA’s benchmark 2035 government bond was slightly firm in early deals, as the yield fell 1.5 basis points to 8.615%.
–Reuters–
