Rand recovers before inflation data

The rand recouped some of the previous day’s losses early on Wednesday, before the release of inflation data which is expected to show a significant slowdown in price rises for consumer goods.

At 0711 GMT, the rand traded at 13.93 versus the dollar, 0.2% stronger than its previous close.

Among factors supporting the rand, China – a major South African trading partner and the world’s second-largest economy – said it would step up fiscal spending to support growth.

Statistics South Africa will release December consumer inflation data around 0800 GMT.

Inflation is expected to slow to 4.5% year-on-year from 5.2% in the previous month, economists polled by Reuters predicted.

South Africa’s central bank referred to an improved near-term inflation outlook at its latest monetary policy meeting this month, when it kept its repo rate unchanged. The bank tries to keep inflation close to the midpoint of its 3% to 6% target range.

Read: Kganyago says mid-point target allows for shocks

Stocks opened slightly weaker, with the Johannesburg Stock Exchange’s All-share index down 0.15% at 53 999 points. Government bonds also dipped, as the yield on the benchmark 2026 instrument rose 1 basis point to 8.870%.