The South African (SA) Rand was muted in early Monday trade, with investors holding back ahead of domestic inflation data expected to reflect pressures from war in the Middle East.
The Rand traded at 16.7150 against the Dollar , little changed from its previous close.
Statistics SA will release April inflation data on Wednesday, with analysts polled by Reuters expecting it to accelerate to 3.9% year on year, up from 3.1% in March.
ETM analytics said in a note that it sees domestic inflation heading towards 5% if oil prices remain buoyant and the local currency depreciates further.
As a net fuel importer, SA is heavily exposed to the spike in global energy prices.
“The situation in the Middle East has already dragged on too long, and second-round inflationary pressures are now just a matter of time,” said ETM Analytics.
The statistics agency will also publish retail sales on Wednesday, though analysts say the March figures are unlikely to show weakness as they predate the full escalation of the Iran war.
On the Johannesburg Stock Exchange, the Top-40 index was down 0.6% in early trade.
SA’s benchmark 2035 government bond was also weaker, with the yield up 7.5 basis points at 8.89%.
–Reuters–
