South African rand flat; investors await rate decision

JOHANNESBURG (Reuters) -The South African rand was little changed on Wednesday as investors awaited an interest rate decision on Thursday.

At 1640 GMT, the rand traded at 17.1800 against the U.S. dollar, compared to Tuesday’s close of 17.1850.

“There is clear reluctance to adopt any significant directional momentum while investors wait for the SARB’s decision and guidance tomorrow,” ETM Analytics said in a research note.

A Reuters poll published last week showed that 11 of 20 economists expect the South African Reserve Bank to hike rates by 50 basis points (bps) to 7.50% at its monetary policy meeting on Thursday. Eight project an increase of 25 bps and one forecast no change.

Most economists polled by Reuters see no further rate hikes after this week.

“Any comments that come across as hawkish will help the rand recover lost ground,” ETM said.

Crippling power cuts have weighed on the rand in 2023, with struggling state utility Eskom on Wednesday announcing an increase in the intensity of the outages for the remainder of the week.

The Johannesburg Stock Exchange’s All-share index closed down about 0.4%. The yield on the government’s benchmark 2030 bond rose 1 basis point to 9.65%, reflecting a weaker price.

(Reporting by Anait Miridzhanian and Alexander Winning)


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