JOHANNESBURG (Reuters) -South Africa’s rand strengthened on Wednesday after the central bank left its main interest rate unchanged as widely expected.
At 1621 GMT, the rand traded at 18.9075 against the U.S. dollar, about 0.5% stronger than its previous close.
The dollar was last trading up about 0.06% against a basket of global currencies.
The South African Reserve Bank (SARB) held the repo rate at 8.25%, saying its policy stance still needed to be restrictive to address elevated inflation expectations.
The decision was in line with the forecasts of analysts polled by Reuters.
South Africa’s consumer inflation ticked up for the second month in a row in February, moving closer to the SARB’s upper target of 6%, which economists say could mean a longer wait for rate cuts this year.
The SARB prefers inflation between 3% and 6% and reiterated on Wednesday that it would like to see it sustainably around the midpoint of that range before considering rate cuts.
“It now seems more likely that interest rates will remain unchanged deep into the third quarter, followed by two cuts of 25 bps (basis points) each in September and November,” said analysts at Nedbank in a research note.
On the stock market, the Top-40 index closed 0.4% higher.
South Africa’s benchmark 2030 government bond was stronger, with the yield down 5 basis points to 10.555%.
(Reporting by Nellie Peyton and Bhargav Acharya, Editing by Kirsten Donovan)
