The rand was slightly weaker against the dollar on Wednesday afternoon after the release of worse-than-expected inflation data. Statistics SA reported a rise to 6.8% in consumer inflation for December, which was slightly higher than that of the annual rate of 6.6% in November. Analysts had expected inflation to have moderated to 6.5% in December. At 3.30pm the rand was at R13.5533 to the dollar from Tuesday’s R13.4670. It was at R14.4426 against the euro from R14.4265 and at R16.6460 against the pound from R16.7199. The euro was at $1.0658 from $1.0712. Nedbank’s economic unit said the surprise to the upside in the inflation underlined the fact that caution should still be applied before calling the end of the Reserve Bank’s interest-rate raising cycle. They expected the monetary policy committee to remain cautious and leave the prime interest rate at 7% for some time, "given the downside risks posed to the rand by a volatile domestic landscape and changing global dynamics".
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