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Illustration photo shows a two-rand coin above a South African flag April 12, 2017. REUTERS/Thomas White/Illustration

South African rand weakens; c.bank seen raising rates next week

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Friday, January 20th, 2023
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The South African rand weakened on Thursday, as a Reuters poll predicted the central bank would deliver another interest rate hike next week.

At 1532 GMT, the rand traded at 17.3400 against the U.S. dollar, 1.14% weaker than its previous close.

Eleven of the 20 economists polled by Reuters predicted the South African Reserve Bank would raise rates by 50 basis points to 7.50% at its upcoming rate-setting announcement on Jan. 26.Advertisement · Scroll to continue

Most economists saw no further rate hikes after next week, forecasting the end of a tightening cycle that began in November 2021.

Recent economic data in Africa’s most industrialised nation have been mixed, with weak November mining numbers (ZAMNG=ECI) released this week, followed by in-line December inflation figures (ZACPIY=ECI) and better-than-expected November retail sales (ZARET=ECI).

On the stock market, the Top-40 (.JTOPI) index ended 0.58% lower and the broader all-share (.JALSH) index dropped 0.45%.

However, Woolworths (WHLJ.J) was up almost 5% after South African food and fashion retailer raised its profit growth forecast, saying it now expected half-year earnings to jump as much as 80% on strong Black Friday sales and festive demand.

The government’s benchmark 2030 bond was weaker in afternoon deals, with the yield up 8.5 basis points to 9.740%.

SOURCE: Reuters

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