The rand was relatively stable at stronger levels on Thursday morning‚ benefiting from improved global risk appetite writes Andries Mahlangu.
US Federal Reserve chairwoman Janet Yellen helped to trigger a rally on global markets after signalling that the US central bank would increase interest rates at a moderate pace due to concerns around inflation‚ which remains below its 2% target.
The rand‚ along with other emerging-market currencies‚ were beneficiaries of what appeared to be the Fed’s less-hawkish stance. The dollar was also on the defensive against a basket of currencies.
The rand has appreciated by nearly 30c to the dollar since Yellen’s testimony to the US Congress on Wednesday afternoon. She will resume her testimony to Congress later in the day.
A stronger rand helps to keep a lid on inflation‚ which the South African Reserve Bank’s monetary policy committee expects to average 5.7% in 2017. The committee meets next week to decide on interest rates.
Some economists expect the committee to cut rates later in the year‚ citing a benign inflation profile and weak economic growth prospects.
At 8.19am‚ the rand was at R13.2373 to the dollar from Wednesday’s R13.2500‚ at R15.1542 to the euro from R15.1207 and at R17.1275 to the pound from R17.0746.
The euro was at $1.1447 from $1.1412.
