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Rand slips before South African Reserve Bank’s rate decision - REUTERS
JOHANNESBURG, Sept 18 (Reuters) – The South African rand slipped on Thursday ahead of an interest rate decision by the central bank.
At 0622 GMT, the rand traded at 17.45 against the dollar, about 0.3% weaker than Wednesday’s close.
The South African Reserve Bank is scheduled to announce later in the day whether it will adjust its main lending rate. Economists polled by Reuters widely expect the central bank to keep the rate unchanged at 7.00%.
Headline inflation in Africa’s most industrialised economy unexpectedly slowed in August due to softer fuel and food prices.
“The actual outcome for August is positive and plays into the SARB narrative that inflation should be targeted at 3%,” said independent economist Elize Kruger.
“But inflation expectations are still quite a bit higher and the upward trend towards 4.2% in December 25 should keep the SARB from cutting interest rates at this meeting,” said Kruger.
Still, some analysts believe Thursday’s decision could be a close call, with the surprisingly soft inflation print providing a possible incentive for a rate cut.
South Africa’s benchmark 2035 government bond was flat in early deals, as the yield rose half a basis point to 9.175%.
