JOHANNESBURG, Dec 17 (Reuters) – The South African rand gained on Tuesday after domestic data showed a pickup in the leading business cycle indicator in October from September, and slightly softer than expected inflation in November.
At 1409 GMT, the rand traded at 16.7050 against the dollar, about 0.3% stronger than its previous close.
South Africa’s leading business cycle indicator rose 0.4% month on month in October, data from the South African Reserve Bank showed.
That compared with a 0.2% month-on-month decline in September.
The indicator collects data on vehicle sales, business confidence, money supply, and other factors.
November consumer inflation data came in at 3.5% year-on-year, bolstering expectations that the central bank will cut interest rates further next year.
Economists polled by Reuters had expected annual inflation to come in at 3.6% for November, unchanged from October.
“The softer-than-expected South African headline inflation reading and weak core inflation will give the Reserve Bank plenty of confidence that it can meet its new, lower 3% inflation target,” William Jackson, chief emerging markets economist at Capital Economics, said in a research note.
At last month’s rate-setting meeting the South African Reserve Bank lowered its main lending rate by 25 basis points to 6.75%, citing an improved inflation outlook.
On the Johannesburg Stock Exchange, the Top-40 index was last up 1.3%.
South Africa’s benchmark 2035 government bond was muted, with the yield down 1 basis point to 8.375%.
(Reporting by Anathi Madubela.
Editing by Rashmi Aich and Mark Potter)
