South Africa’s rand recovers from two-week low as keeps rates on hold

PUBLISHED: Fri, 26 Mar 2021 06:20:06 GMT

JOHANNESBURG, March 26 (Reuters) – South Africa’s rand rose on Friday, recovering from a two-week low hit in the previous session, after the central bank kept lending rates unchanged, bucking the trend of rate hikes in other emerging markets.

At 0600 GMT, the rand traded at 14.9600 against the dollar, 0.32% firmer than its close on Thursday, when it broke through the key 15.00 level.

“The unit has clawed back some lost ground in the overnight session to dip back below R15 and, as the week draws to a close, it will be an important marker to watch, setting the tone for the coming week,” said Citadel Global executive director Paul Muller.

The South African Reserve Bank left its repo rate at 3.5% in a unanimous decision, saying overall risks to the inflation outlook appeared to be balanced and that pass-through from currency volatility was low.

Emerging-market central banks have come under pressure in recent weeks due to rising bond yields globally, weakening currencies and rising inflation strains. Policymakers in Brazil, Russia and Turkey have announced rate increases.

In fixed income, the yield on the benchmark government bond due in 2030 was down a single basis point to 9.525%. (Reporting by Olivia Kumwenda-Mtambo; Editing by Rashmi Aich)

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