JOHANNESBURG (Reuters) -The South African rand was little moved on Wednesday after the release of slightly better-than-expected inflation data as traders looked ahead to the central bank’s interest rate decision due on Thursday.
At 1408 GMT the rand traded at 17.16 against the dollar, little moved from its previous close.
Statistics agency data showed that South African inflation rose in October, but by less than expected, prompting analysts to predict that the interest rate decision by the central bank will likely be a close call.
Headline consumer inflation climbed to 3.6% year-on-year, while economists polled by Reuters had predicted 3.7%.
“The slight uptick in October’s Consumer Price Index technically provides the South African Reserve Bank with the space to cut rates by 25 basis points tomorrow,” said Lindi Geldenhuys, an economic analyst at Econometrix.
But Zain Vawda, market analyst at MarketPulse by OANDA, said he expects the Monetary Policy Committee to opt for caution as risks to inflation remain tilted to the upside.
“I do expect inflation to settle but when this will occur will likely depend on trade and tariff developments in the coming weeks,” Vawda said.
Statistics South Africa also published retail sales data which pointed to a 3.1% rise year-on-year in September.
On the Johannesburg Stock Exchange, the Top-40 index was last up 1.2%.
South Africa’s benchmark 2035 government bond price edged up, as the yield fell 1.5 basis points to 8.66%.
(Reporting by Anathi Madubela and Sfundo Parakozov;Editing by Jane Merriman and Emelia Sithole-Matarise)
