The rand was firmer at midday on Friday as the market priced in the increasing unlikelihood of the Reserve Bank raising interest rates at its November meeting. Spurred on by a weaker dollar, the local currency reacted favourably to the Bank’s stance on Thursday to keep the repo rate on hold at 6.75%, against expectations in a split decision among members of the monetary policy commitee (MPC). Analysts said the Bank would be hard pressed to reduce rates further as the political tensions mentioned by the Bank in the MPC statement were not expected to abate as the year progresses. "Going by current logic, with the MPC being a bit hesitant, we can expect a hold in November as the event risk in December will be a lot more significant than now," said TreasuryOne dealer Andre Botha. This could push out the next rate cut into 2018, he said. The rand was supported by inflows into the bond market. "We have seen sharp inflows in the bond market after the Reserve Bank left rates unchanged," ana...
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.