Rand weaker as markets eye interest-rate decisions by Reserve Bank and Fed
The rand was weaker against the dollar on Monday afternoon, as the market expected no change in interest rates in the US when the Federal Reserve pronounces on the matter on Wednesday. The dollar has weakened in the light of the Fed’s expected decision, while there is also concern the central bank could use the opportunity to signal an unwinding of its inflated balance sheet. The likelihood of a US interest-rate hike by the end of year stands at 56%, according to CME’s FedWatch. Some analysts expect a cut in the local repo rate of 25 basis points when the Reserve Bank announces its decision on Thursday. This may boost GDP growth, which may be rand supportive in the coming months. "We think it will be a close call, but the Reserve Bank may not cut on Thursday, preferring to skip a meeting and wait for November," Rand Merchant Bank (RMB) analyst John Cairns said. Although the rand could experience some weakness ahead of consumer inflation data set to be released this week, further ran...
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