The rand was more than 1% firmer against the dollar in late afternoon trade on Friday, as inflows into the bond market supported the local currency amid general dollar weakness. The rand was supported by the Reserve Bank’s more optimistic outlook on consumer inflation, thereby supporting local bonds. On Thursday, the Reserve Bank cut the repurchase rate 25 basis points to 6.75%, surprising a market that had widely expected rates to be kept on hold until September. Momentum SP Reid analysts said the rand could firm further to R12.82/$, despite lower interest rates reducing the return on interest-bearing investments, such as bank deposits. Momentum said a reversal in the rand on the rate cut had not occurred, as the dollar remains under pressure in global markets. "There was insufficient evidence to conclude that decisive weakness for the rand will emerge as a result of the lower yield differential," Momentum said. Reserve Bank governor Lesetja Kganyago said on Thursday that the rand ...
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