JOHANNESBURG (Reuters) -The South African rand edged lower on Wednesday, as the dollar bounced back ahead of the release of U.S. Federal Reserve minutes of its last policy meeting.
At 1450 GMT, the rand traded at 15.7325 against the dollar, 0.54% weaker than its previous close.
The dollar index strengthened on Wednesday, ahead of the U.S. central bank’s minutes from its May 3–4 meeting where traders may glean clues about the Fed’s pace of tightening.
The Federal Open Market Committee (FOMC) is expected to release the minutes at 1800 GMT.
While markets expect 50-basis-point rate hikes over the next several months, there are also concerns that the Fed’s aggressive policy tightening could weigh on economic recovery.
At home, the South African Reserve Bank last week increased its prime lending rate by 50 basis points to 4.75%, its highest increase in six years, to rein in inflation.
The central bank said on Wednesday the risk of a spillover of the Russia-Ukraine war could hurt South Africa’s financial stability through rising food and fuel inflation, lower economic growth and high unemployment.
On the Johannesburg Stock Exchange (JSE), the All-Share index was down 0.16% at 67,585 points, while the Top-40 index was flat at 61,176 points, and tech stocks on JSE ended higher after recouping some of their losses from Tuesday.
Big movers also included South Africa’s largest food producer Tiger Brands Ltd, which ended up 4.27% following its half-year results, while hospital operator Mediclinic International Plc ended 4.61% higher after doubling its full-year profit.
The yield on the government’s benchmark 2030 bond was up 2.5 basis points, with the yield at 9.76%.
(Reporting by Alexander Winning, Olivia Kumwenda-Mtambo and Bhargav Acharya; Editing by Shailesh Kuber)
