JOHANNESBURG, Jan 24 (Reuters) – South Africa’s rand weakened against the dollar on Tuesday as investors awaited the central bank’s decision on monetary policy later this week.
At 1520 GMT, the rand traded at 17.2525 against the dollar, 0.28% weaker than its previous close. The dollar was
0.27% firmer against a basket of major currencies .
The South African Reserve Bank (SARB) will announce its rate decision on Thursday, with 11 of the 20 economists polled by Reuters predicting a hike of 50 basis point (bps) to 7.50% (ZAREPO=ECI). Eight projected an increase of 25 bps and one no change.
Most economists polled by Reuters see no further rate hikes after this week.
“The rand could gain somewhat on a 75bp increase in the repo rate instead of 50bp this week, although the ongoing loadshedding remains a substantial, overshadowing negative effect on the domestic currency,” Investec analyst Annabel Bishop said.
Loadshedding, a term for scheduled power cuts, has become a daily occurrence in South Africa, crippling business activity and weakening investor confidence.
The government’s benchmark 2030 bond was up on Tuesday, with the yield down 3.5 basis points to 9.745%.
On the Johannesburg Stock Exchange, the Top-40 index (.JTOPI) and the broader all-share index (.JALSH) closed down about 0.1%.
Reporting by Anait Miridzhanian and Nellie Peyton; Editing by Uttaresh.V and Mark Porter
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