JOHANNESBURG (Reuters) – The South African rand was largely flat after the central bank kept interest rates unchanged as it cautiously monitored the effect of previous cuts.
At 1402 GMT, the rand traded at 17.41 against the dollar, near Wednesday’s closing level.
South Africa’s central bank kept its key interest rate unchanged at 7%, in line with economists polled by Reuters.
“Since September last year, we have reduced rates by 125 basis points, and we want to see how this is affecting the economy, how expectations evolve, and how inflation risks are resolved,” Governor Lesetja Kganyago said on Thursday.
“The rand has been surprisingly weak post the SARB rates decision,” said Shaun Murison, senior analyst at Rand Swiss, adding that the SARB’s upward revision to its growth forecast for this year from 0.9% to 1.2% would be welcomed.
Some analysts had thought that the central bank would cut rates after headline inflation in Africa’s most industrialised economy unexpectedly slowed in August due to softer fuel and food prices.
On the Johannesburg Stock Exchange, the Top-40 index was also little moved.
South Africa’s benchmark 2035 government bond was flat as the yield rose half a basis point to 9.175%.
(Reporting by Sfundo Parakozov and Anathi Madubela; Editing by Alex Richardson and Andrew Heavens)
