Rand on slippery slope ahead of central bank meetings

THE rand was on a slippery slope on Monday morning‚ deepening the losses it suffered last week as a result of international factors.

 

The local currency changed hands at R13.33/$‚ a big shift from a week ago when it was at R12.87.

But the weakness was even more pronounced in the rand versus the pound‚ after the Bank of England (BoE) prepared the markets for a potential increase in interest rates in the coming months.

This week short-term catalysts could come from the US Federal Reserve Bank and South African Reserve Bank‚ which will announce their interest rates decisions.

In the case of the local central bank‚ markets expect it to reduce the repurchase rate by a least 25 basis points.

Cutting local rates has the potential to reduce the relative appeal of the domestic currency‚ especially from the point of view of foreign capital.

Local inflation data is due out on Wednesday. Consumer inflation is expected to have crept up to an annual rate of 4.8% in August‚ from 4.6% in July.

At 9.37am‚ the rand was at R13.2237 to the dollar from R13.1696‚ R15.7684 to the euro from R15.7032; and R17.9259 to the pound from R17.8662‚ a loss of 1.7%.

The euro was at $1.1926 from $1.1925.

-BusinessLIVE

Source: TMG Digital.

Leave a Reply