JOHANNESBURG (Reuters) -South Africa’s rand slipped against the dollar on Wednesday as a drop in domestic inflation did little to prop up the currency ahead of an interest rate decision by the U.S. Federal Reserve.
By 1512 GMT, the rand was trading at 19.0350 against the dollar, about 0.5% weaker than its previous close.
Headline consumer inflation fell to 5.5% year-on-year in November from 5.9% in October, data from the statistics agency showed, a slightly bigger fall than the 5.6% predicted by analysts polled by Reuters.
Jason Tuvey, deputy chief emerging markets economist at Capital Economics, said inflation was expected to hover around its current rates until the middle of next year.
“While officials at the Reserve Bank will take comfort from the fact that headline inflation has moved well below the upper bound of their target range, the fresh rise in core inflation means that they will probably stick to their hawkish rhetoric early next year,” he said.
The South African Reserve Bank targets inflation between 3% and 6%.
The focus of global markets is on an interest rate decision by the Fed due at 1900 GMT and its policy outlook.
On the stock market, the benchmark Top-40 index closed about 0.1% higher.
South Africa’s benchmark 2030 government bond was stronger, with the yield down 2 basis points at 10.060%.
(Reporting by Bhargav Acharya; Editing by Clarence Fernandez and Alex Richardson)
