The South African rand strengthened, buoyed by expectations of a busy week ahead with several key interest rate announcements and local inflation data.
By 0720 GMT, the rand was trading at 17.66 against the dollar, marking a 0.6 percent increase from its previous close.
ETM Analytics highlighted the importance of the upcoming data in shaping South Africa’s economic outlook over the coming months.
On the agenda for tomorrow are South Africa’s August consumer inflation figures. After falling to 4.6 percent year-on-year in July slightly above the South African Reserve Bank’s (SARB) target of 4.5 percent a reading close to the target could solidify expectations of a rate cut from the SARB on Thursday. Economists surveyed by Reuters forecast a 25 basis point reduction.
ETM Analytics noted that while the SARB’s decision will be a major focus this week, it is not the only significant central bank announcement. The US Federal Reserve will also reveal its policy decision tomorrow, with markets anticipating a rate cut, though opinions are divided on the magnitude of the reduction. Additionally, the Bank of England is expected to maintain its current lending rate when it makes its announcement on Thursday.
In early trading, South Africa’s benchmark 2030 government bond also saw gains, with its yield dropping 6.5 basis points to 8.85 percent.
