Rand weakens against the US dollar

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NewRandMoney Reuters.

Johannesburg - The rand declined for a second day, extending this year’s worst drop among emerging-market currencies, before a report that may show inflation in South Africa was unchanged in January.

The currency of Africa’s biggest economy slipped less than 0.1 percent to 8.8579 per dollar by 8:40 a.m. in Johannesburg, after appreciating 0.3 percent last week.

Yields on benchmark 10.5 percent bonds due December 2026 were unchanged after dropping four basis points, or 0.04 percentage point, to 7.30 percent on February 15.

Markets in the US are closed for a public holiday today.

Consumer-price growth was probably unchanged at 5.7 percent in January from a month earlier, according to the median estimate of 17 economists in a Bloomberg survey.

Predictions for the data, which will be released on February 20, range from 5.4 percent to 5.9 percent.

Statistics South Africa is using a new price basket for the index, which increases the weighting of energy costs.

The central bank target range for inflation is 3 percent to 6 percent.

“We would be surprised by an acceleration in the January reading,” Carmen Nel and Mamello Matikinca, analysts at Johannesburg-based Rand Merchant Bank, who estimate inflation eased to 5.5 percent, said in e-mailed comments.

“If our forecast proves to be accurate, it will be bullish for local rates.” - Bloomberg News


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