The rand was stable on Thursday morning as traders exercised caution ahead of the South African Reserve Bank’s interest rate decision later in the day.
At 8.32am‚ the rand was at R16.4284 against the dollar‚ from R16.4431 previously.
Against the euro‚ the rand was at R17.8691 from R17.9077 previously. It was at R23.4094 against the pound from R23.3855 previously.
The euro was at $1.0877 from $1.0893 previously.
The Bank is widely expected to increase the repo rate — the rate at which it lends to commercial banks — from the current 6.25% but opinions are split on whether the increase will be 25 or 50 basis points.
This would take the prime interest rate — the rate commercial banks charge consumers for loans — to either 10% or 10.25%‚ from the current 9.75%.
Of the 13 economists surveyed‚ six forecast rates to rise by 25 basis points‚ six saw rates being hiked by 50 basis points‚ while one projected unchanged rates.
Barclays Research said the rand could weaken if the Reserve Bank did not demonstrate its mettle with an aggressive hike.
The Bank will announce its decision at about 3pm.
- TMG Digital/BDlive
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