JOHANNESBURG (Reuters) – The rand was stable ahead of South African inflation data on Wednesday which was likely to give the market a steer on next week’s interest rate decision.
Traders and analysts said a lower than expected CPI inflation print at 0800 could trigger renewed pressure on the local unit in the run up to the central bank’s policy meeting ending Jan. 29.
The local currency was trading at 11.5875/dollar by 0647 GMT, barely changed from Tuesday’s closing level of 11.5925.
The rand has held its own in the last two sessions, despite the market scaling back its expectations for interest rates to rise this year as inflation slows.
“The lack of bite the dollar seems to be showing of late against the rand is concerning from a momentum point of view and it now looks like a renewed test of the 11.52 support level is but moments away,” Standard Bank trader Warrick Butlersaid.
The Reserve Bank increased the benchmark repo by 75 basis points to 5.75 percent last year and signalled rates would have to rise further, but the outlook has since become murkier as a sharp drop in oil prices is seen pushing inflation lower.
Local government bonds were steady at Wednesday’s open, with the yield on paper maturing in 2026 flat at 7.38 percent.
(Reporting by Stella Mapenzauswa; Editing by James Macharia)
