JOHANNESBURG, Sept 19 (Askume) – The South African rand fell in early trade on Thursday after the South African Reserve Bank (SARB) decided to cut interest rates for the first time in four years, following the Federal Reserve’s sharp cut to the 200-mark.
By 1600 GMT, the rand was trading at 17.4775 against the dollar, up about 0.4% from its previous close.
The dollar fell 0.3% against other currencies.
As predicted by economists polled by Askume , the SARB alsojoined the easing club and cut interest rates (JAREPO=ECI) by 25 basis points (bps) but kept the tone dovish, saying although inflation will fall faster than expected, risks to the outlook still exist.
Data on Wednesday showed South Africa’s annual inflation rate fell to 4.4% last month, the lowest since April 2021 and just below the midpoint of the central bank’s target range of 3% to 6%.
“The rand strengthened for a seventh consecutive day and hit a low of 17.39, but lost strength in the second half of the day,” Wichard Cilliers, head of market risk at TreasuryOne, said after the rate decision.
The rand traded at 17.39 per dollar on Thursday, its highest level since February 2023.
The Federal Reserve cut interest rates by 50 basis points on Wednesday, weakening the dollar and strengthening the risk-sensitive rand .
The Johannesburg Stock Exchange Top-40 Index (.JTOPI) closed up about 1.3%.
South Africa’s benchmark 2030 government bonds edged higher, with the yield falling 1 basis point to 8.84%.
