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Rand to track global trends as market awaits rate call

Jan 22 2016 09:47

Johannesburg - The rand was mostly flat against the dollar in early on Friday trade, with traders and analysts expecting it to take its steer from global trends as investors await next week's monetary policy statement by the South African Reserve Bank (Sarb).

The local bourse looked set for a strong start, as indicated by a 1.7% jump in the Top 40 futures index.

The rand was changing hands at R16.5400 to the greenback by 08:55, just 0.13% firmer than its R16.5610 Thursday close in New York.

The rand has had a turbulent start to 2016, shedding 7% after losing about a quarter of its value last year as investors fretted about South Africa's economic prospects and those of China, a major importer of local commodities.

"We maintain that the trend for the rand is to move weaker, and we’d expect pull-backs to be shortlived," Standard Bank said in a market note.

The sharply weaker rand is expected to drive inflation higher, forcing the Sarb to raise interest rates next week despite sluggish economic growth of around 1.5%, according to economists polled by Reuters.

On the debt market, government bonds edged higher, and the yield for the instrument maturing in 2026 dipped 2 basis points to 9.615%.

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rand  |  markets  |  currencies

 
 
 
 

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