Rand firms as inflation comes in as expected
The rand was slightly firmer against major global currencies on Wednesday morning, wobbling only slightly after inflation for October came in as expected.
SA’s inflation rate in October was 5.1% on an annualised basis, in line with market expectation. Core inflation — which strips out volatile items such as food and fuel — was slightly lower than expected, at 4.2% compared with 4.3%.
At 10.04am the rand was 0.39% firmer against the dollar at R14.0379, 0.24% against the euro at R15.9901 and 0.25% against the pound at $17.975. The euro was 0.17% weaker at $1.1391.
Focus this week is now expected to shift to the Reserve Bank monetary policy decision on Thursday, which has served to keep the rand rangebound so far this week. Analysts are almost evenly split on whether or not a 25 basis-points increase is in the offing.
Easing fuel prices and subdued economic activity is expected to ensure that inflation does not breach the Bank’s 6% upper limit.
Some analysts have pointed to geopolitical risks to the rand, noting that keeping rates on hold would be unlikely to boost SA’s economic performance much.
Markets appeared to be waiting for a fresh stream of news, or data, in order to find a direction, said TreasuryOne senior currency dealer Andre Botha.
Source: businesslive.co.za
