Rand gains 2% on the dollar after Turkey finally hikes rates
The rand was firmer against major global currencies on Thursday afternoon, benefiting positively from gains in the Turkish lira, after that country’s raised interest rates by 625 basis points to 24%.
US inflation data was also supportive, coming in at 2.7% year-on-year in August, less than the 2.8% expected by the market. US inflation rate is closely watched by investors as they attempt to gauge the pace of US monetary policy tightening.
The Turkish lira firmed 4% as a result of the hike, with the rand riding on the coat tails of those gains, said Peregrine Treasury Solutions corporate treasury manager Bianca Botes.
The monetary policy decision could help ease investor concerns over the central bank’s independence from Turkey’s President Recep Tayyip Erdogan, whose call for lower rates earlier on Thursday had weighed heavily on the lira, reported Dow Jones Newswires.
The rand earlier found some support from risk-on sentiment globally, after the US indicated it wanted fresh talks with China over their trade disputes.
At 3pm, the rand was at R14.6504 to the dollar, from R14.9639 on Wednesday. It was at R17.1117 to the euro from R17.3923, and at R19.1786 to the pound from R19.5182. The euro was at $1.1681 from $1.1626
The yield on the benchmark R186 bond was at 9.11%, from 9.19%, and the R207 at 7.71% from 7.795%.