The rand was flat on Thursday morning with market expectation that the Reserve Bank’s monetary policy committee (MPD) will keep rates on hold. Reserve Bank governor Lesetja Kganyago will deliver his bimonthly speech shortly after 3pm. Consensus is that the repo rate will be kept at 7%. The rand made good ground on Wednesday after Statistics SA reported the consumer price index (CPI) for April came in at 5.3% year on year, down from 6.1% in March. The market had expected inflation to moderate to between 5.4% and 5.6%. Investec Economist Kamilla Kaplan said much of the deviation between consensus expectations and the actual headline CPI outcome could be accounted for by food price developments. Kaplan said the inflation trajectory showed a return to the Reserve Bank’s target range of 3%-6% in 2017, on softer food price growth and a continued absence of meaningful demand-led inflation. Strength in the rand also came from rumours the ANC’s national executive committee (NEC) at its meeti...
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