South African rand edges higher before inflation data
- The South African Reserve Bank (SARB) tries to keep inflation between 3% and 6%.
JOHANNESBURG: South Africa's rand was slightly firmer early on Wednesday, before the release of inflation data which were expected to show growing price pressures in Africa's most industrialised economy.
At 0605 GMT, the rand traded at 14.2550 against the dollar, roughly 0.1% stronger than its previous close.
Statistics South Africa will publish the consumer price index around 0800 GMT.
Economists expect it to rise to 5.2% year on year in May from 4.4% in April, which would mark the first time the indicator has risen above the midpoint of the central bank's target range since COVID-19 reached South Africa.
The South African Reserve Bank (SARB) tries to keep inflation between 3% and 6%, and it regularly talks about where it is in relation to the midpoint of that band.
Despite building price pressures, economists are not predicting the SARB will raise rates when it next meets in July. When Reuters last polled analysts in May survey medians suggested the bank would keep its repo rate at 3.5% throughout 2021, sticking to an accommodative monetary policy stance.
Government bonds also firmed in early deals on Wednesday, as the yield on the benchmark 2030 instrument dropped 4 basis points to 9.025%.
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