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Johannesburg - The rand firmed against the dollar on Thursday as the South African Reserve Bank (Sarb) defended its inflation targeting policy, saying it was the best approach to reducing price pressures while contending with slowing economic growth.
The Sarb's out-going governor Gill Marcus told a policy conference that the bank was unlikely to raise its inflation target from the current 3-6% band.
The rand regained some of the ground lost overnight after a hawkish statement on interest rates by the US central bank saw it flounder, and by 15:09 GMT traded 0.72% firmer at 10.8730 per dollar.
"The FOMC (Federal Open Market Committee) really caused a bit of chaos in the dollar overnight, and the rand went up close to 11.000," said Jim Bryson, a currency trader with Rand Merchant Bank.
The local unit had slipped to 10.9515 at market close in New York on Wednesday as the greenback raced to its strongest in over three weeks against a basket of major currencies.
The rand has traded below the crucial 11.000 mark in the past five sessions following the Treasury's promise last week to cut government expenditure, while managing a 7-week high of 10.8240 on Tuesday.
Yields on the benchmark paper due in 2026 inched up 1.5 basis points to 7.91%.
