Rand firms ahead of rate decision

The rand firmed in early trade on Thursday as the US dollar eased, and as investors await a central bank rates decision where a hike is expected to contain high inflation.

At 0606 GMT, the rand traded at R16.05 against the dollar, 0.31% firmer than its previous close.

The safe-haven dollar index edged lower as signs of an easing in Shanghai’s coronavirus lockdown lifted appetite for riskier assets in the global market.

Investors await the South African Reserve Bank’s monetary policy decision, to be announced at a media briefing due to start at 1300 GMT.

A Reuters poll published on Friday forecast the bank would make its first 50 basis-point repo rate hike in more than six years, taking it to 4.75%, to prevent potential second-round effects from higher consumer prices.

Consumer price inflation remained at a five-year high of 5.9% in April, just within the central bank’s 3%-6% target range, according to data published by Statistics South Africa earlier on Wednesday.

In fixed income, the yield on the benchmark 2030 bond was up 1.5 basis points to 9.995%.