Rand steady at firmer levels as Reserve Bank keeps rates unchanged
The rand held steady at a three-week high against the dollar after the Reserve Bank’s monetary policy committee (MPC) kept interest rates unchanged, as expected. Reserve Bank governor Lesetja Kganyago said the Bank was worried about the deteriorating inflationary outlook but emphasised that economic growth remains subdued. "We view the risks to inflation to be on the upside." This is despite consumer inflation slowing to 4.9% year-on-year in August, down from 5.1% in July. However, economists expect it to rise towards the upper end of the Bank’s 3% to 6% target range in the coming months. The MPC was divided on the decision with three members in favour of a 25-basis-point hike while four were for keeping rates on hold. Just three of 19 economists in a Bloomberg survey predicted a rate hike. The rand was also supported by a weaker dollar, with the US currency on the back foot on concerns of an escalating global trade war and that US interest rates are set to rise in an environment of...
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