Rand Holds Steady Ahead of SARB Rate Decision Next Week
By Aboki Forex —
JOHANNESBURG – The rand traded flat in early Friday trade as investors stayed on the sidelines before the South African Reserve Bank’s interest rate decision next week.
At 0651 GMT, the rand was at 16.47 against the dollar, barely changed from its previous close.
All eyes are on the SARB’s Monetary Policy Committee meeting on Thursday. Most economists forecast a 25-basis-point rate hike, likely with a split vote.
“The SARB may hike interest rates at the upcoming MPC meeting to reduce the likelihood of second-round inflation pressure,” said Elna Moolman, Standard Bank’s head of South Africa macroeconomic research. But Moolman added that policymakers could argue monetary conditions are already tight enough and look past what is expected to be a temporary inflation spike.
Data this week showed inflation accelerated sharply to 4% in April from 3.1% in March. That was the highest level since August 2024.
Investors will also watch a series of economic indicators due next week. These include the leading business cycle index on Tuesday, producer inflation on Thursday, and figures for money supply, private sector credit, trade balance, and budget balance on Friday.
The U.S. dollar was flat against a basket of currencies after a volatile overnight session. Conflicting signals over a potential U.S.-Iran peace deal kept markets cautious, though some hoped for progress.
On the Johannesburg Stock Exchange, the Top-40 index rose 0.7%. South Africa’s benchmark 2035 government bond was little moved in early deals, with the yield at 8.77%.