Cape Times E-dition

RAND FIRMER, JSE WEAKER

THE RAND firmed further against the dollar yesterday after the SA Reserve Bank hiked its prime lending rate by 50 basis points to 4.75 percent, its biggest hike in more than six years, in a move to rein in inflation.

At 5.30pm, the rand was trading at R15.83 against the dollar, 1.66 percent stronger than its previous close.

Consumer price inflation remained at a five-year high of 5.9 percent in April, just within the bank’s 3 percent-6 percent target range, according to data published by StatsSA on Wednesday.

SA Reserve Bank governor Lesetja Kganyago said prices would continue to exert upside pressure on inflation due to the Ukraine crisis.

“In the near-term, headline inflation … is forecast to breach the target range in the second quarter,” he said, adding it would return closer to the mid-point in the fourth quarter of 2024.

The rand was further supported by a fall in the dolllar with the safe-haven dollar index falling as easing in Shanghai’s coronavirus lockdown lifted appetite for riskier assets in the global market.

“The MPC’s decision to hike the repo rate by 50 bps has provided a second tailwind for the rand, which was already strengthening on the back of the pullback in the USD,” Kieran Siney of ETM Analytics said in a comment emailed to Reuters.

In fixed income, the yield on the benchmark 2030 bond was up 11 basis points to 9.87 percent.

Shares on the JSE slumped heavily yesterday as a batch of corporate commentary from US retailers fanned worries of inflation eating into the profits of companies and as shares of tech companies in Hong Kong were on the decline.

The benchmark all share index closed 1.21 percent weaker at 68 245.84 points while the blue-chip index of top 40 companies dropped 1.23 percent at 61 725.52 points.

BUSINESS REPORT

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2022-05-20T07:00:00.0000000Z

2022-05-20T07:00:00.0000000Z

https://capetimes.pressreader.com/article/281934546557174

African News Agency