South Africa's rand firmer ahead of interest rate decision

  • Reuters
  • Forex News
South Africa's rand firmer ahead of interest rate decision
Credit: © Reuters.

JOHANNESBURG, Sept 20 (Reuters) - South Africa's rand firmed against a softer dollar early on Thursday as expectations that the central bank would leave its main lending rate unchanged for a third meeting in a row boosted investor appetite for the local currency.

* The rand ZAR=D3 was up 0.82 percent at 14.5225 per dollar at 0650 GMT, having closed in New York at 14.6425.

* Markets were awaiting the interest rate decision of the South African Reserve Bank (SARB), due at 1300 GMT.

* All bar one of the economists polled by Reuters last week see the SARB leaving benchmark rates at 6.5 percent ZAREPO=ECI , with the need to keep inflation in check outweighing weak economic growth and the rand's recent plunge. Lower inflation and relatively high lending rates, which have sustained demand by yield-hungry investors despite the poor growth outlook, will likely be helped aided by a rate hold.

* In fixed income, the yield on the benchmark government bond due in 2026 ZAR186= was down 3.5 basis points to 9.065 percent.

* Stocks are due open higher at 0700 GMT, with the JSE securities exchange's Top-40 futures index ALSIc1 up 0.34 percent.

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