Rand and local bonds rally as inflation surprises to the downside
Inflation grew at a slower rate in August on a year-on-year basis, slowing from July, according to Stats SA
The rand and local bonds rallied by mid-morning on Wednesday, after inflation unexpectedly slowed in August, boosting the attractiveness of the local assets.Inflation grew at a slower rate of 4.9% in August on a year-on-year basis, slowing from 5.1% in July, Stats SA said in a statement. The benign inflation figures could help take pressure off the Reserve Bank, whose monetary policy committee is scheduled to decide on interest rates on Thursday."The weaker-than-expected consumer price index (CPI) inflation outcome for August will alleviate the expected upward trajectory in CPI inflation for the rest of this year and into next year, thereby reducing the pressure somewhat on the [Reserve Bank] to hike interest rates this week, although, globally, interest rates remain in an upward cycle, particularly in [emerging markets]," Investec economist Annabel Bishop said in a note.The yield on the benchmark R186 bond fell to 9.135%, from 9.205%. This compares favourably to government bond rat...
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