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Johannesburg - The rand was on track for its fourth consecutive daily gain against the dollar on Thursday after comments by deputy SA Reserve Bank governor Daniel Mminele overnight buoyed expectations for another interest rate hike.
In a speech to investors in New York, Mminele said the reserve bank was aware of the inflationary effects of the rand's recent fall and was prepared to act to protect the currency's value.
Mminele's comments came in the wake of similarly hawkish rhetoric from fellow deputy governor Lesetja Kganyago, whose appointment this week to head the bank when current head Gill Marcus retires in November, cheered the market.
Statistics South Africa reported on Thursday that manufacturing output contracted on a year-on-year basis in August, but at a much lower pace than analysts had predicted, which means the central bank has leeway to hike rates despite weak economic growth.
At 14:50 GMT, the rand was at R11.05/$, not far off its previous close, and after earlier scaling a three-week high of R10.9630/$.
"Selling interest remains prevalent on the dollar-rand with a break of the key psychological 11.0000 handle," Tradition Analytics said on a note.
"A sustained break below the 10.9730 handle will target 10.9080."
Government debt edged higher, with the yield for the benchmark bond due in 2026 falling 5.5 basis points to 8.095%.
The rand has rallied more than 3% against the dollar this week, helped by the appointment of Kganyago which assured markets that the reserve bank would remain independent and continue to pursue transparent monetary policy.
