JOHANNESBURG: South Africa’s rand slipped on Thursday ahead of an interest rate decision by the central bank. At 0736 GMT, the rand traded at 18.15 against the dollar, 0.2% weaker than its previous close.
Like most risk-sensitive currencies, the rand has been rocked by escalating tensions between Russia and Ukraine, which sent investors scurrying towards safe-haven assets like the dollar.
The currency has so far lost about 3% against the greenback this month.
The South African Reserve Bank will announce the last interest rate decision for the year later on Thursday, where it is expected to cut rates by 25 basis points.
South African rand firms on S&P outlook upgrade
Commerzbank analyst Volkmar Baur said the SARB was unlikely to cut rates more sharply despite October local inflation falling below the central bank’s target range of 3% to 6%.
“In view of the geopolitical situation it is likely to remain cautious and save a further interest rate cut for next year,” Baur said.
On the stock market, the Top-40 index was up 0.35%. South Africa’s benchmark 2030 government bond was marginally stronger, the yield down 1.5 basis points at 9.03%.
Comments