Rand flat ahead of rates decision

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NewRandMoney Reuters.

Johannesburg - The rand was largely flat against the dollar on Thursday ahead of a central bank decision on interest rates later in the session.

The currency was unmoved from its New York close, trading at 10.6800 per dollar at 08:00 SA time after nudging up in the previous session after statistics revealed domestic retail sales had grown ahead of market forecasts in May.

The market remained split on whether Reserve Bank Governor Gill Marcus will hike interest rates or keep them unchanged at 5.5 percent.

Eighteen of the 31 economists polled by Reuters expected the Reserve Bank to keep rates accommodative at 5.5 percent in light of the frail economy, despite inflation sitting above the bank's 3-6 percent range.

“Retail sales have been rather resilient in 2014 despite weak GDP growth, suggesting that the slowdown in the economy is from the supply side and not the demand side,” said Christie Viljoen of NKC Independent Economists in a market note.

“It does not appear that higher interest rates since January have so far done much to spending levels.”

Yields on government bonds were also flat as the paper due in 2015 as well the longer-dated 2026 paper remained at 6.655 percent and 8.17 percent respectively. - Reuters

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