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Rand inches higher against dollar as analysts expect repo rate hike next week

The rand edged higher in early trade on Wednesday, as a dollar rally cooled, and analysts predicted the South African Reserve Bank would raise interest rates next week. Photo: File

The rand edged higher in early trade on Wednesday, as a dollar rally cooled, and analysts predicted the South African Reserve Bank would raise interest rates next week. Photo: File

Published Jan 19, 2022

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THE rand edged higher in early trade on Wednesday, as a dollar rally cooled, and analysts predicted the South African Reserve Bank (SARB) would raise interest rates next week.

At 0700 GMT, the rand traded at R15.5050 against the dollar, roughly 0.1 percent stronger than its previous close.

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The rand had been dragged lower on Tuesday by rising US Treasury yields which supported the dollar. But the dollar slipped back 0.1 percent against a basket of currencies as of Wednesday morning in Johannesburg.

A Reuters poll predicted the SARB would raise its main lending rate by another 25 basis points to 4.00 percent on January 27 to combat rising inflation, which could support the rand.

At around 0800 GMT, the statistics agency will publish December inflation figures, which are expected to show a further rise to 5.7 percent year-on-year from 5.5 percent in November, approaching the top of the SARB's 3-6 percent target range.

The government's benchmark 2030 bond was slightly weaker in early deals, with the yield rising 2.5 basis points to 9.485 percent.

REUTERS

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