JOHANNESBURG: The South African rand extended losses in early trade on Wednesday, as investors turned their attention to local inflation figures which may give clues on the country’s future interest rate path.
At 0649 GMT, the rand traded at 18.4225 against the dollar , over 0.1% weaker than its previous close. The rand tumbled against the greenback on Tuesday.
“The rand (is) coming under pressure as market participants sit on the side lines waiting for our June CPI (consumer inflation) print later this morning,” Rand Merchant Bank analysts said in a research note.
“Ahead of CPI later this morning look for ranges to persist,” Rand Merchant Bank analysts added.
Statistics South Africa will release local inflation figures for June at around 0800 GMT on Wednesday, which may give hints on the future interest rate path of Africa’s most industrialised economy.
South African rand weakens, eyes on inflation data
Economists polled by Reuters expect June year-on-year inflation at 5.1%. Inflation was seen at 5.2% the month before.
Inflation has been above 5% since September 2023, and the central bank estimates that inflation will only stabilise at its targeted 4.5% over the next few quarters.
Monetary policy has remained tight as the central bank tries to steer inflation back towards the midpoint of its 3%-6% target range.
South Africa’s benchmark 2030 government bond was stronger in early deals, as the yield slipped 2.5 basis points to 9.435%.
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