The Reserve Bank’s monetary policy committee meets next week and again in two months after raising the benchmark lending rate by 75 basis points this year to 5.75 percent. While inflation eased to 6.3 percent in July, remaining above policy makers’ target, the gauge stripping out food, energy and gasoline costs climbed to the highest level since January 2010.
“We could see another interest-rate increase,” Ronel Oberholzer, an economist at Pretoria-based IHS Global Insight Southern Africa, said by phone yesterday. “The bank will probably use the rand’s movement as a reason, but then it would pause and see what happens with growth, which will be bad this year.”
The US Dollar remains in a consistent uptrend against the Rand and rallied this week from the region of the 200-day MA. A sustained move below ZAR10.50 would be required to question medium-term potential for additional strength.
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