The rand was slightly firmer against the dollar on Friday morning following the Reserve Bank’s surprise interest-rate cut. On Thursday, the Bank cut the repurchase rate by 25 basis points to 6.75%. Economists and analysts had expected the Bank to keep rates on hold, despite slowing inflation. They had also said that an interest rate cut might be perceived as the Bank succumbing to political pressure to prioritise growth over inflation and change its mandate of price stability. Governor Lesetja Kganyago said the rand remained vulnerable to increased global risk aversion, domestic political shocks, and to the possibility of further ratings downgrades. Kganyago said the improved inflation outlook and the deteriorated growth outlook informed the monetary policy committee’s decision to cut interest rates. On Wednesday, Statistics SA said inflation for June had eased to 5.1% on an annualised basis‚ from 5.4% in May. The governor, however, warned that the environment remained uncertain and...
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