Home South African Rand trades firmer ahead of SA Reserve Bank monetary policy meeting

Rand trades firmer ahead of SA Reserve Bank monetary policy meeting

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The rand was firm in early trade on Tuesday, holding on to gains made in the previous session, as traders awaited the South African Reserve Bank’s monetary policy decision due later in the week.

The rand was firm in early trade on Tuesday, holding on to gains made in the previous session, as traders awaited the South African Reserve Bank’s monetary policy decision due later in the week. Photographer: Nadine Hutton/Bloomberg

The rand was firm in early trade on Tuesday, holding on to gains made in the previous session, as traders awaited the South African Reserve Bank’s monetary policy decision due later in the week.

At 06.15 GMT, the rand traded 15.2350 against the dollar, 0.1 percent firmer than its close on Monday when the currency was buoyed by improving global sentiment as upbeat Chinese economic data eased concerns about a slowdown in the world’s second-largest economy.

Investors are awaiting domestic inflation data, due alongside retail sales data on Wednesday, and the South African Reserve Bank’s (SARB) monetary policy committee meeting.

“The market focus remains on the SARB MPC, although there does not appear to be a consensus view yet on any action from the central bank,” Nedbank analysts said in a note.

The central bank starts its three-day monetary policy committee meeting later in the day, with the decision on interest rates due on Thursday.

The SARB slashed its repo rate by 300 basis points last year to a record low as the economy battled the coronavirus crisis. However, inflation has accelerated since July’s 4.6 percent year-on-year, to 5 percent in September.

A Reuters poll found 13 of 20 economists surveyed between November 10 and12 said the repo rate would be kept unchanged at 3.50 percent, while the other seven predicted a hike of 25 basis points.

But in an extra question answered by 12 economists, a median of responses suggested there was an almost 50 percent chance the SARB would hike interest rates at this meeting.

REUTERS

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