The South African bond market was little changed on Thursday morning, suggesting a degree caution before key announcements from central banks. The South African Reserve Bank’s monetary policy committee will announce its decision on interest rates later in the day. The Bank is under pressure to cut rates, given the moderation in inflation. Headline inflation, which the Bank closely monitors in its rate-setting policy, slowed to an annual rate of 5.1% in June, its lowest level since 2015, prompting some economists to expect loose monetary policy as early this afternoon. But the dominant view is that Bank governor Lesetja Kganyago would hold fire for now, given the volatility of the rand exchange rate, which analysts say poses a potential risk to the outlook on inflation. Rand Merchant Bank analyst Gordhan Kerr said: "Any confirmation that a rate cut is … imminent should provide further fuel for our bonds to rally." Local bonds have benefited from the recent pick-up in global risk appe...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.