Rand firms ahead of central bank rate decision

The rand firmed in early trade on Thursday, ahead of a central bank interest rate decision later in the day.

At 11:31, the rand traded at R18.05 against the dollar.

The South African Reserve Bank (Sarb) is due to announce its latest monetary policy move at a news conference starting around 3 pm, with investors expecting a 25-basis-point increase.

“Market focus is likely to rest on the statement and the projections with the new rate outlook,” Elisabeth Andreae, FX analyst at Commerzbank, said in a research note, adding that the hike is largely priced in by markets.

Statistics South Africa data showed last week that February inflation rose to 7.0% year on year from 6.9% in January, remaining above the bank’s target of between 3% and 6%.

The government’s benchmark 2030 bond was stronger in early deals, with the yield down 3 basis points to 9.785%.