The rand showed some firm strength against the US dollar on Tuesday as the country waits for the Reserve bank to issue its latest decision on interest rates.
The rand was trading at around R18,87 to the dollar at 9am.
The rand was trading at around R23,86 to the pound sterling and R20.47 to the euro.
Wealth and Asset management company Anchor Capital noted that the rand was strengthened against the dollar yesterday.
The rand was trading at around R18,92 against the dollar at the close of business on Monday. This was around 0.5% stronger than its previous close.
According to Reuters analysts, the rand tends to take cues from the dollar in the the absence of major economic data.
Interest rate decision looms
Most home owners who have home loans and investors are waiting with bated breath as the South African Reserve Bank (SARB) gears up for its upcoming Monetary Policy Committee (MPC) meeting tomorrow.
Arthur Kamp, chief economist and Patrick Buthelezi, an economist, at Sanlam Investments said on Tuesday that the bank is leaning towards no change in the repo rate amid higher recent inflation prints.
Both economists argued that after some careful examination of the economic indicators and the factors influencing the SARB that investors and home owners can have some cautious optimism but need to be patient.
“At the heart of the matter lies the intricate interplay between domestic economic conditions and global macroeconomic dynamics. Headline consumer price inflation has been trending lower from a peak of 7.8% in July 2022. Despite the recent relatively high print of 5.6% in February 2024, the downward trajectory in inflation is expected to resume over the next year towards the SARB’s effective target of 4.5%. A relatively favourable inflation outlook could prompt calls for immediate rate cuts, but prudence dictates a more nuanced approach,” Kamp and Buthelezi noted.
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