South African rand steadies before rate call

The South African rand was largely steady in early trade on Friday as investors held back from making big bets ahead of the Reserve Bank’s interest rate decision next week. At 0651 GMT, the currency was trading at 16.47 to the dollar, almost unchanged from its previous close.

Market attention is firmly on the South African Reserve Bank’s Monetary Policy Committee meeting scheduled for Thursday. Most economists expect a 25-basis-point rate hike, though the vote is likely to be split.

Standard Bank’s head of South Africa macroeconomic research, Elna Moolman, said the central bank may raise rates to limit the risk of second-round inflation pressures. She also said policymakers could decide that monetary conditions are already tight enough and look through what may prove to be only a temporary inflation spike.

That debate comes after inflation accelerated sharply to 4% in April from 3.1% in March, its highest level since August 2024. Investors will also watch several key data releases next week, including business cycle, producer inflation, credit, trade and budget figures.

Elsewhere, the Johannesburg Stock Exchange’s Top-40 index rose 0.7%, while South Africa’s benchmark 2035 government bond was little changed, with the yield at 8.77%. The U.S. dollar was flat against a basket of currencies after a volatile session tied to shifting signals over a possible U.S.-Iran peace deal.