RAND AND STOCKS WEAKER

THE RAND weakened against the dollar yesterday, after inflation held steady at the top of the central bank’s target range and retail sales numbers disappointed, a day before the central bank announces its interest-rate decision.

At 5.24pm, the rand traded at R15.99 against the dollar, 0.56 percent weaker than its previous close.

Data data published by StatsSA earlier yesterday showed that in April, consumer price inflation remained at a five-year high of 5.9 percent, in line with a Reuters poll and just within the central bank’s 3 percent-6 percent target range.

Retail sales advanced 1.3 percent year-on-year in March, below expectations of 1.5 percent and a 0.3 percent fall from February.

“March’s modest reading evinces the financial pressure many households are still facing in the current economic environment,” Investec economist Lara Hodes said in a note.

“An expected higher interest rate and cost environment is clearly suppressing sentiment.”

A stronger dollar also weighed on riskier assets worldwide, including the rand.

On the JSE, the all share index ended down 0.88 percent at 69 083.44 points and the blue-chip index of top 40 companies closed down 0.84 percent at 62 494.43 points, driven by a fall in resources companies.

Tech stocks on the JSE also closed lower, including Naspers, which was down 4.76 percent at R1 598, while its subsidiary Prosus fell 3.05 percent to R756.25.

Investors now await the SA Reserve Bank’s monetary policy decision this afternoon. A Reuters poll forecast the bank would make its first 50 basispoint repo rate hike in more than six years, taking it to 4.75 percent.

In fixed income, the yield on the benchmark 2030 government bond dipped two basis points to 9.98 percent.