The Reserve Bank kept interest rates unchanged on Thursday, when the monetary policy committee (MPC) wrapped up its first meeting of 2018. With a number of risk events on the horizon, the decision was expected by the majority of analysts, and leaves the repo rate at 6.75%, where it has been since the July 2017 cut of 25 basis points — the first cut in five years. Reserve Bank governor Lesetja Kganyago said that since the previous meeting of the MPC, the rand had appreciated by 13.1% against the dollar, by 9.6% against the euro, and by 10.6% to the pound on a trade-weighted basis. He did warn, however, that “in the near term, the rand is expected to remain sensitive to sentiment generated by political developments. The lingering prospect of a credit-ratings downgrade to sub-investment grade by Moody’s [also] continues to weigh on the longer-term outlook for the rand.” Within a few minutes of the decision being announced, the rand strengthened to R12.19 to the dollar, from R12.27 prio...

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