JOHANNESBURG - The rand recovered yesterday from its weakest in a month after consumer inflation figures for August suggested interest rates will fall further, reviving economic growth.
At 5pm, the rand was 0.32% firmer at R13.264 to the dollar, reversing losses of the last week-and-a-half caused by a report showing stronger US inflation, which pushed it as low as R13.35, its softest since August 15.
The rand has surrendered about 5% since September 6, tumbling through crucial technical support that saw traders mark the currency for short-selling.
But the rand recovered yesterday after SA reported consumer inflation rose less than expected, to 4.8% year-on-year in August from 4.6% in July.
The central bank concludes its three-day monetary policy committee meeting today.
An announcement by the treasury that it had successfully issued a pair of dollar bonds in overseas capital markets worth $2.5billion (about R33.2bn) also aided the recovery.
Traders said the outcome of the US Federal Reserve’s policy meeting last night would also affect the rand.
Meanwhile, stocks were weaker yesterday as Sasol weighed on the market after announcing a dilutive share issue.
The benchmark JSE Top40 index was down 0.35% at 49575.88 points, while the broader all share index declined 0.2% to 55867.46 points.
Petrochemical company Sasol dropped to a two-month low after announcing a plan to issue new shares. Shares in Sasol slumped 6.4% to R373.
Gold Fields climbed 3.08% to end the session at R59.58.