Rand, Nam dollar flex muscle again

South Africa&#039;s rand, and the pegged Namibian dollar, firmed yesterday as the country’s annual consumer price inflation eased for a second consecutive month.The rate for December came in at 5.1%, down from 5.5% the previous month.The median expectation of a Bloomberg survey of economists was 5.2%.South Africa’s average consumer inflation last year is now calculated at 6%. That&#039;s lower than 6.9% in 2022.At 0647 GMT, the rand traded at 18.9975 against the US dollar, about 0.2% stronger than its previous close. By lunchtime, the currency traded at 18.87 against the greenback.But even though the inflation rate eased, it&#039;s not where the South African Reserve Bank (SARB) wants it."Stubbornly elevated inflation expectations, anchored above the midpoint of SARB&#039;s 3% to 6% inflation target, will support a continued hawkish policy stance by the Monetary Policy Committee in the forthcoming months – but easing global price pressures combined with the underlying weakness in domestic demand will support the commencement of a shallow interest rate cutting cycle [in South Africa] towards the middle of 2024," debt manager Futuregrowth said in a note.Interest ratesThe SARB holds its first monetary policy committee meeting of the year today.Most economists expect rates to remain unchanged at 8.25%.SARB governor Lesetja Kganyago has said he wants to see inflation decline sustainably to around 4.5% before considering rate cuts. To maintain the currency peg with the rand, the Bank of Namibia (BoN) traditionally takes its monetary policy cue from the SARB. The repo rate in Namibia currently stands at 7.75%.The BoN’s first monetary policy meeting for the year is on 14 February. – Own report/Fin24/Reuters

Rand, Nam dollar flex muscle again

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Rand, Nam dollar flex muscle again

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