JOHANNESBURG: South Africa's rand was weaker on Friday, a day after the central bank adopted a less hawkish tone at its monetary policy meeting.
At 1615 GMT, the rand traded at 13.7925 per dollar, 0.5 percent lower than its previous close.
The South African Reserve Bank kept its benchmark repo rate unchanged at 6.75 percent on Thursday, as expected, but noted an improved near-term inflation outlook.
Its models now forecast just one interest rate increase by the end of 2021, thanks to lower expectations for global oil prices and a stronger rand prediction.
"Given policymakers' change of heart, we now expect that they will keep their key rate on hold for the duration of 2019. Indeed, we think that attention will soon focus on the possibility of rate cuts," Capital Economics said in a research note.
In fixed income, the yield on South Africa's benchmark 2026 government bond rose 9.5 basis points to 8.895 percent on Friday, reflecting weaker bond prices.
Local equities rose in line with global markets, after a report suggesting there had been progress in resolving the trade dispute between the United States and China, South Africa's biggest trading partner.
On the Johannesburg Stock Exchange, the Top-40 index gained 0.61 percent to 47,585 points, while the All-share index rose 0.55 percent to 53,731 points.
Among the top risers, Shoprite gained 2.05 percent to 190.07 rand and bourse heavyweight Naspers rose 0.62 percent to 3,062.52 rand.
Comments
Comments are closed for this article.