S.Africa's rand, bonds steady ahead of MPC

Thu Mar 29, 2012 7:48am GMT
 

JOHANNESBURG (Reuters) - South Africa's rand and government bonds held steady against the dollar on Thursday ahead of a central bank interest rate decision at 1300 GMT, and a day after S&P downgraded its credit outlook for the continent's biggest economy.

The rand was trading at 7.6725 to the dollar at 0646 GMT, little-changed from Wednesday's New York close of 7.6760.

South Africa releases the February producer price index at 0730 GMT and the Reserve Bank announces its decision on interest rates later this afternoon.

Economists surveyed by Reuters expect February producer price inflation to brake to 8 percent from 8.9 percent the previous month, while the repo rate is seen unchanged at historical lows of 5.5 percent.

"It has been fairly quite ahead of PPI and the repo rate later today. We will look for important comments to drive the market," said a Johannesburg trader.

The rand slipped on Wednesday after the S&P outlook downgrade, which was based on concerns about sluggish growth over the longer-term feeding putting pressure on the budget and hitting the government plans to trim its budget deficit.

Yields on the two main benchmark government bonds were up just one basis points, with the 2015 yield at 6.81 percent and that on the 2026 note at 8.47 percent.

The stock market opened a shade lower, with the Johannesburg bourse's blue-chip Top-40 index down 0.2 percent shortly after the 0700 GMT start of trade.

A new five rand coin is displayed by a South African Reserve Bank worker during its launch at the South African Mint July 27, 2004.

Market Update

  • Africa
  • US
  • Europe
  • Asia
UK £ USD =1.6085
Euro USD =1.2669
Rand USD =0.0915