South Africa’s rand firmed on Wednesday after data showed consumer inflation accelerated in July, signalling the likelihood of domestic interest rates hikes.

At 1549 GMT, the rand traded at 16.9500 against the dollar, 0.25% stronger than its previous close.

Headline consumer inflation quickened to 7.8% year on year in July from 7.4% in June, data from Statistics South Africa showed.

Analysts polled by Reuters had forecast consumer price inflation of 7.7% in July.

South African rand weakens against strong dollar

Investec analyst Annabel Bishop said in a research note that the Reserve Bank could raise interest rates by at least 50 basis points next month.

On the stock market, the Top-40 index rose 0.07% to 63,079 points, while the broader all-share was up 0.05% to 69,808 points.

The government’s benchmark 2030 bond was almost unchanged, with the yield at 10.300%.