The South African bond market was firmer on Tuesday morning ahead of the outcome of the Reserve Bank’s monetary policy committee meeting in the afternoon. The meeting comes after an unexpectedly high consumer inflation rate of 6.8% in December 2016. This was up from 6.6% in November on a year-on-year basis and outside the Bank’s target band of 3%-6%. Despite this, there is a general consensus that the central bank will leave the repo rate unchanged at 7%. NKC African Economics economists said they expected the interest rate to remain unchanged due to "a combination of dismal domestic growth prospects for this year and beyond, the stronger rand, lower food price inflation towards year-end and low domestic demand". The rand was at R13.4447 to the dollar from R13.4724, which contributed to the firmer bond market. US treasury bonds held stronger in early trade despite the dollar stabilising after experiencing a weak spell following a negative reaction to US President Donald Trump’s prot...
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