Rand Firms After SARB Hikes Repo Rate
The rand firmed against the US dollar on Thursday after the South African Reserve Bank (SARB)
hiked its repo rate
by 75 basis points as expected. At 20h40 the rand traded 1.28% firmer at R17.02 a
, R20.62 to the
, and R17.71 to the
. The bank assessed that “risks to the inflationary outlook remain skewed to the upside while the risks to the medium-term domestic growth outlook are assessed to the downside. Accordingly, inflation forecasts were revised slightly higher for this year and 2023 but lowered for 2024. Meanwhile, the central bank cut its growth forecast for the current year saying fourth-quarter growth will be impacted by power cuts as coal-fire state power utility Eskom struggles with power generation,” reported Trading Economics. The local bourse also closed up at 0.32%.
While Wall Street was closed for the Thanksgiving holiday in the US, chemical counters supported European markets, with the three main indices closing in the green.
Asian markets lagged behind their global counterparts due to Covid infections reaching new highs in China, “stoking fears that authorities would adopt tighter restrictions that could negatively affect the economy.” While the Shanghai closed by 0.25% in the red, the Hang Seng rose by 0.76%, and the Nikkei by 0.95%.
Lower Treasury yields and a softer US dollar boosted the price of gold which traded at $1 754.28 an ounce at 20h45, while a barrel of Brent crude traded at $85.02 at the same time.
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The Rand actually depreciated after the SARB's MPC 75bps hike announcement.Like 0
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