Rand notes. Picture: THINKSTOCK
None - Rand notes. Picture: THINKSTOCK

The rand stumbled on Wednesday morning after headline inflation moderated in further July, backing the case of economists who expect the Reserve Bank to cut the repurchase rate before the end of the year.

Inflation moderated to an annual rate of 4.6% in July as expected, the lowest level since September 2015, from 5.1% in July, according to Statistics SA data.

At least 11 economists surveyed by Reuters last week expected the Bank to ease monetary policy as early as September.

"The interest rates on offer in SA are attractive to the developed world and this helps attract external capital," said Jameel Ahmad, vice-president of Corporate Development and Market Research.

"However, the confirmation that the South African economy entered a technical recession a few months back justifies the need to discuss the possibility of lower interest rates. This may not be the best news for investors, but the prospect of lower borrowing rates should help stimulate spending.

At 10.03am‚ the rand was at R13.2535 to the dollar from R13.2238, at R15.6159 to the euro from R15.5529, and at R16.9881 to the pound from R16.9568.

The euro was at $1.1783 from $1.1761.

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