Rand firms 1% against the dollar on slightly upbeat inflation data
The rand held onto its gains against major global currencies on Tuesday afternoon, after some fairly good local economic news.
SA’s inflation rate in October came in at 5.1% on an annualised basis, in line with the Trading Economics consensus forecast. Core inflation — which strips out volatile items such as food and fuel — was, however, slightly lower than expected, at 4.2%, compared with 4.3%.
The inflation print comes ahead of a Reserve Bank interest-rate decision on Thursday, although there is no clear consensus on what the Bank might do.
“Persistently low underlying inflationary pressures suggest that the Bank’s expectations of an increase in core inflation to a 4.8% average over the quarter of 2018 are high,” said FNB chief economist Mamello Matikinca. “While our view is for a 25-basis-point increase in the policy rate, benign underlying inflation may delay a policy rate hike.” she said.
Global focus remains on the issues of Brexit and the US-China trade war, although volatility in the oil price is also being eyed.
At 2pm, the rand was up 1.03% against the dollar at R13.9483, 0.76% against the euro at R15.9057, and 0.86% against the pound at R17.865. The euro was 0.27% firmer at $1.1403.
Source: businesslive.co.za
