JOHANNESBURG (Reuters) -South Africa’s rand strengthened on Wednesday ahead of a highly anticipated interest rate decision by the South African Reserve Bank (SARB).
At 1545 GMT, the rand was trading at 16.9850, up 1.54% from its previous close.
Earlier in the day, data from Statistics South Africa showed the country’s headline consumer inflation quickened to 7.6% year-on-year in October, from 7.5% in September.
Analysts polled by Reuters had expected headline inflation to dip to 7.4% in annual terms.
The uptick in inflation is likely to give impetus to the SARB’s hawkish stance at its final meeting of the year on Thursday. A Reuters poll forecast last week that the central bank would hike its repo rate another 75 basis points to 7%.
“The higher inflation print provides further support to a 75 basis point hike by the South African central bank, which will look to keep pace with that of its global peers,” said Shaun Murison, senior market analyst at IG.
Shares on the Johannesburg Stock Exchange rose, with the Top-40 index closing up 1.01% and the broader all-share index ending 0.9% higher.
The government’s benchmark 2030 bond was stronger, with the yield down 9 basis points at 10.195%.
(Reporting by Anait Miridzhanian, Bhargav Acharya and Susan Mathew; editing by Rashmi Aich and Mark Heinrich)
