Rand firmer after Reserve Bank keeps rates on hold
The rand firmed against major global currencies on Thursday afternoon, after the Reserve Bank kept rates on hold, in a unanimous decision.
Bank governor Lesetja Kganyago warned, however, of possible risks to the rand, and thereby inflation. He said the inflation outlook was moderate but risks remained, and the "bottom of the inflation cycle has been reached".
A resurgent dollar has put the rand and other emerging-market currencies under pressure of late, something that has fanned inflation. Oil prices also breached $80 a barrel this week, putting additional pressure on consumers.
"The resurgent US dollar and higher US long-bond yields have led to sharply lower capital flows to the emerging markets.
"These developments, coupled with persistently rising international oil prices, have contributed to the reversal of some of the recent rand strength, tilting the balance of risks to the domestic inflation outlook to the upside," Kganyago said.
Global focus was on a decision by the Turkish central bank on Thursday to raise lending rates by three percentage points to 16.5%, something analysts said had improved sentiment towards emergingvmarkets.
Having earlier traded flat against the dollar, at 3.26pm the rand was at R12.4125 to the dollar from R12.4509, R14.5564 to the euro from R14.5642 and R16.6264 to the pound from R16.6297.
The euro was at $1.1728, from $1.1697.