By Tannur Anders
JOHANNESBURG (Reuters) -South Africa’s rand was stable on Thursday after the South African Reserve Bank kept its main interest rate unchanged for the seventh meeting in a row.
The decision by the central bank’s Monetary Policy Committee was split, with four members preferring the current rate of 8.25% and two favouring a 25-basis-point rate cut.
At 1431 GMT, the rand traded at its previous close of 18.1950 against the dollar.
Monetary policy has remained tight in Africa’s most industrialised economy as the central bank tries to steer inflation back towards the midpoint of its 3%-6% target range.
Consumer inflation stood at 5.2% year on year in May, the latest month for which data is available, the same as in April. June data will be released next week.
The SARB reduced its headline inflation forecast for 2024 to 4.9% from 5.1%.
In lowering its inflation forecast, the central bank has acknowledged the positive market reaction to the election, the lower risk perception of the country and the reduced need to protect the rand from speculative bets, said Danny Greeff, co-head of Africa at ETM Analytics.
“All-in-all, there was not much for the market to trade on today,” Greeff added.
Investor focus will shift to a speech by President Cyril Ramaphosa on Thursday evening in Cape Town, when he is expected to outline the priorities of the newly formed broad coalition government.
On the stock market, the Top-40 index was slightly stronger at 0.15%.
South Africa’s benchmark 2030 government bond was weaker, as the yield gained 4.5 basis points to 9.645%.
(Reporting by Tannur Anders and Bhargav Acharya; Editing by Janane Venkatraman and Krishna Chandra Eluri)
