South Africa's rand weaker ahead of inflation data - CNBC Africa

South Africa's rand weaker ahead of inflation data

Southern Africa

by Reuters 0

South Africa's rand weaker ahead of inflation data. PHOTO: Money 101

The rand weakened against the dollar early on Wednesday ahead of inflation data that could persuade South Africa's central bank to lift interest rates this week.

By 0600 GMT the rand had slipped 0.24 per cent to 12.3560 per dollar, with a pause in the recent commodity rout not enough to give the local unit a sustained lift.

The rand clawed to a one week high of 12.3230 late in Tuesday's session before sliding weaker along with fellow emerging market currencies.

Consumer prices are expected to have ticked up when the national statistics agency publishes June figures at 0800 GMT, bolstering the case for a rate hike by South Africa's Reserve Bank (SARB) on Thursday.

"The SARB will likely be cognisant of the fine balance between high inflation and low growth," analysts at Nedbank said in a note to clients.

The possibility remained the SARB could hold rates until monetary tightening begins in the U.S. Federal Reserve, likely in September, analysts say.

Yields on government bonds edged lower in early trade, with the benchmark issue due in 2026 down 0.05 basis points to 8.15 percent.