The Rand traded at 17.3225 against the Dollar, near Monday’s closing level.
“If anything, the Rand is disappointing in its movements at the moment. Data shows that the performance of the Rand is heavily linked to the interest foreigners show in SA’s bond market,” ETM Analytics said in a research note.
SA benchmark 2035 government bond was slightly weaker in early deals, as the yield rose one basis point to 9.225%, after gaining 12 basis points on Monday, trading around its best level since 2018.
ETM Analytics said the boost came from a survey which showed that longer-term inflation expectations dropped to a record low, after the South African Reserve Bank (SARB) said it would aim for a lower inflation target.
“The survey highlighted how the SARB has already achieved some success in forcing inflation expectations lower, which has attracted more flows into the bond market and, by extension, the Rand,” the note read.
It added that the Rand will take further guidance from the Federal Reserve and SARB rate decisions this week and the relative carry trade that might follow.
SA’s Central Bank will announce its rate decision on Thursday, preceded by the release of Consumer Price Index, figures on Wednesday and retail sales.
On the Johannesburg Stock Exchange, the Top-40 index was last up 0.4% in early trade.
–Reuters–
