RAND REVERSES GAINS

THE RAND dipped yesterday as consumer price data fell more than expected in September to 4.1 percent in annual terms, raising the prospect of further monetary policy easing.

At 5pm, the rand bid at R14.6355 to the dollar, 1 cent softer than at the same time on Tuesday, slipping from its best level in a month touched on Tuesday.

The consumer price index (CPI), which came in below analysts’ forecasts of 4.2 percent, showed inflation remained comfortably within the central bank’s 3 percent-6 percent target range.

“September’s release confirms that consumer price inflation remains well under control in South Africa,” analysts at NKC Research said in a note. “The moderate inflation outlook and dismal economic growth prospects could justify further monetary policy loosening.”

South Africa’s economy is expected to grow by less than 1 percent this year, dented by power cuts at struggling Eskom as well as weak business confidence. That’s a problem for President Cyril Ramaphosa, who has staked his reputation on reviving the country’s economy.

The South African Reserve Bank cut its main lending rate in July but kept it on hold in September. Its next monetary policy committee meeting is in mid-November.

Government bonds were unchanged, with the yield on the benchmark 2026 bond at 8.205 percent.

The JSE all share index fell 0.65 percent to 55 572.18 points points, while the Top40 index shed 0.74 percent to 49 244.44 points, alongside global stocks as risk sentiment took a hit after UK lawmakers pushed the pause button on Brexit.

The risk aversion pushed gold stocks such as AngloGold Ashanti up 5.53 percent to R315.07, Sibanye-Stillwater up 5.27 percent to

R25.79 and Gold Fields up 4.47 percent to R83.50.

Meanwhile, emerging-market shares fell from their highest in more than two months yesterday. I Reuters