Johannesburg - South Africa's rand was largely steady against the dollar on Thursday as the market awaited the Reserve Bank's third policy statement of the year, when it is expected to keep rates unchanged while flagging rising inflation pressures.
Government bonds edged slightly higher, pulling yields down after minutes from the US Federal Reserve on Wednesday pointed to rates in the world's biggest economy remaining depressed for longer.
At 08:59 SA time the rand was trading at 10.3745 to the greenback, little changed from Wednesday's New York close at 10.3685.
The yield for the 2026 government bond eased 4 basis points to 8.13 percent, while that for the instrument maturing in 2015 was down 2.5 basis points at 6.645 percent.
The rand rallied more than 10 cents on Wednesday after domestic inflation came in slightly above forecasts, backing the case for another interest rate hike this year, although it might not necessarily be this week.
“Dovish (Fed) minutes overnight, combined with better-than-expected Chinese PMI data should ensure that the rand maintains a firming bias into this afternoon's monetary policy committee meeting,” Barclays Africa said in a note.
“A rate hike at today's meeting would be rand positive in the short term from an interest rate differential perspective.”
Reserve Bank Governor Gill Marcus will deliver the policy statement from 15:00 SA time. - Reuters