Rates decision slams brakes on rand rally

THE RAND rally fizzled out after the central bank kept rates on hold yesterday.

The central bank left rates steady at 7 percent for a third meeting in a row, in line with expectations, and revised the growth prospects for the country upwards to 0.4 percent.

At 5pm, the rand was bid at R13.6068 to the dollar, 11.53c firmer than at the same time on Wednesday. The local unit had reached a session high of R13.3775, wiping out gains triggered by yesterday’s decision by the US Federal Reserve to keep interest rates unchanged.

“It could be that the flow, linked to specific deals recently, has been satiated, and you’re also seeing the beginning of speculation about rate cuts and that’s getting priced in,” said economist at ETM Analytics, Michael Potgieter.