JOHANNESBURG (Reuters) -South Africa’s rand took its direction from the dollar on Thursday, reacting little to an expected central bank decision to hold its main interest rate at 8.25%.
At 1515 GMT, the rand traded at 18.8400 against the dollar, about 0.2% stronger than its previous close.
The dollar was trading around 0.1% weaker against a basket of global currencies, after reversing course from a strong rise earlier in the day.
Nearly all analysts polled by Reuters had predicted that the South African Reserve Bank (SARB) would keep its lending rate unchanged.
The SARB’s Monetary Policy Committee (MPC) has stressed that it wants to see inflation sustainably around the midpoint of its target range of 3%-6% before considering rate cuts. Inflation edged up to 4.8% year-on-year in August from 4.7% in July.
The bank on Thursday slightly increased its forecast for economic growth in 2023 to 0.7%, from a previous forecast of 0.4%.
“The (rand’s) reaction to the SARB MPC decision and policy statement was relatively muted as the decision was in line with consensus,” said Shaun Murison, senior market analyst at IG.
The rand is currently finding more short-term direction from global economic events than local ones, he said.
On the stock market, the Top-40 index closed down 2.27% while the broader All-share index was 2.12% weaker.
South Africa’s benchmark 2030 government bond was weaker, with the yield up 11 basis points to 10.565%.
(Reporting by Bhargav Acharya, Nellie Peyton and Tannur AndersEditing by Mark Potter and Alexander Winning)
