JOHANNESBURG: The South African rand was little changed early on Tuesday, a day after staging a mini-recovery on relief the country’s credit rating was not downgraded and bets on a large interest rate hike from the central bank this week.

At 0630 GMT, the rand traded at 19.2425 against the dollar, not far from its previous close of 19.2350.

On Monday the rand ended more than 1% stronger. Analysts polled by Reuters predict the South African Reserve Bank (SARB) will deliver a 25-basis-point (bp) rate hike on Thursday.

But markets are pricing in a bigger increase. “The rates markets are now pricing in a repo rate that may still rise by a further 150 bp between now and the end of the year,” ETM Analytics said in a research note. “Aggressive, maybe.

South African rand regains some ground against the dollar

But the (rand) has stabilised off the back of it, which perhaps gives one a sense of what is expected of the central bank to prevent an outright rout on the (rand).“

Sentiment towards South Africa has been badly affected by the worst rolling blackouts on record, which mean businesses and households are in the dark for up to 10 hours daily.

The rand hit a new record low against the dollar on Friday, but it got a reprieve when ratings agency S&P Global held off from changing South Africa’s sovereign credit rating at the end of last week.

Investors will assess the success of the SARB’s efforts to bring inflation under control when April consumer inflation figures are released on Wednesday.

South Africa’s benchmark 2030 government bond was broadly flat in early deals, with the yield down 1 basis point at 11.240%.