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South African rand weakens as interest rate held steady as expected - CNBC
JOHANNESBURG, March 20 (Reuters) – South Africa’s rand remained on the back foot on Thursday after the country’s central bank left its main interest rate unchanged as expected.
At 1352 GMT, the rand traded at 18.22 against the dollar, about 0.5% weaker than its previous close.
The dollar last traded up about 0.7% against a basket of other currencies as markets digested the U.S. Federal Reserve’s decision to hold interest rates and lower the nation’s growth forecast on Wednesday.
The South African Reserve Bank (SARB) paused its rate-cutting cycle, keeping the repo rate at 7.50%, as risks stemming from U.S. President Donald Trump’s global trade war and the country’s deadlocked national budget overshadowed its success in keeping inflation low.
“Some policy adjustments by major central banks are still expected this year, but rates are likely to remain high for longer, given new inflation risks,” central bank Governor Lesetja Kganyago told a press conference.
Economists polled by Reuters had expected the central bank to hold rates steady.
On the stock market, the Top-40 index was last trading around 0.8% lower.
South Africa’s benchmark 2030 government bond was slightly stronger, with the yield down 3.5 basis points at 9.05%.
(Reporting by Sfundo Parakozov and Bhargav Acharya, Editing by David Evans, Kirsten Donovan)
