The South African rand was steady in early trade on Monday as investors awaited this week’s inflation data and the central bank’s policy decision for fresh clues on the interest rate outlook in Africa’s most industrialised economy.
At 0634 GMT, the rand traded at 16.2375 against the dollar , a whisker away from its previous close.
Traders are focused on August consumer inflation data and the South African Reserve Bank’s policy decision, both due on Wednesday.
Headline inflationcooled to 4.3% year-on-year in July, the first fall in five months.
The central bank is widely expected to raise its main lending rate on Wednesday after surprising investors and economists by leaving it unchanged at its previous meeting, saying policy was restrictive enough to return inflation to target within two years.
“Expectations are rising that the SARB will follow the Fed, ECB and BOJ in hiking rates. Not doing so could undermine the rand’s resilience and exaggerate the negative inflation impact that buoyant oil prices will have on inflation and broader monetary policy,” ETM Analytics said in a note.
South Africa’s benchmark 2035 government bond was steady in early trade, with the yield at 8.685%.