South African rand gains as central bank holds rates

(Updates after MPC meeting)

JOHANNESBURG, Sept 23 (Reuters) - South Africa's rand gained strongly on Thursday, as the dollar fell on global markets and the central bank held its main interest rate at a record low.

At 1510 GMT, the rand was trading at 14.6700 against the dollar, around 1.1% firmer than its previous close.

Although the South African Reserve Bank's (SARB) decision to keep its repo rate on hold at 3.5% was expected, some traders took the implied rate path in the bank's Quarterly Projection Model as a sign that the scales were tipping towards a future rate hike.

Carmen Nel, economist and macro strategist at Matrix Fund Managers, said in a research note that the Monetary Policy Committee's (MPC) statement was hawkish enough to keep the door open should the SARB need to act soon.

The safe-haven dollar was down 0.5% against a basket of peer currencies, as risk sentiment improved globally.

Johannesburg-listed stocks rose, with the All-share index ending up 1.1% at 64,049 points and the Top-40 index closing up 1.2% at 57,643 points.

The government's benchmark 2030 bond fell, with the yield rising 6 basis points to 9.145%.

(Reporting by Olivia Kumwenda-Mtambo and Alexander Winning; Editing by Nick Macfie)

First Published: 2021-09-23 08:47:47
Updated 2021-09-23 17:22:21


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