The South African rand changed slightly on Friday, with the central bank retaining most of the gains made in the previous session after announcing the biggest increase in major lending rates in more than six years to curb inflation.
The US dollar’s retreat from two-decade highs also supported the rand this week.
At 17:26, the rand traded at 15.8800 against the dollar, 0.05% lower than its previous close, near the two-week high touched on Thursday.
This week, the rand rose 1.7%, making a temporary recovery after a flight last month from risky emerging market assets.
The Monetary Policy Committee of the South African Reserve on Thursday raised the repo rate by 50 basis points to 4.75% as it stepped up efforts to fight inflation.
It raised its rand forecast to 15.88 against the dollar from 15.41 in the previous MPC meeting in March.
“Inflation and higher risks to the RAND have greatly increased the likelihood of a path to a more aggressive interest rate,” Nedbank economists said in a note on Thursday.
Consumer price inflation rose to 5.9% year-on-year in March and April, near the top of the central bank’s 3% -6% target range, driven by higher fuel and food prices associated with the war in Ukraine.
On the Johannesburg Stock Exchange (JSE), the all-share index fell 0.98% to close at 67,575 and the blue-chip index of the top 40 companies fell 1.18% to close at 60,999 points, mainly pulled by luxury goods maker Richmont which weighed heavily on an index. , Even most sectors have done well.
South African billionaire Johan Rupert, chairman of Richmont, warned on Friday that China’s recovery would be slower than expected.
Read: Rupert of Richmont predicts ‘turbulent times’ amid global crisis
Investors’ shares fell nearly 13% on the JSE amid fears that মালিক 55 billion owners of brands such as Cartier and Mont Blanc would post bad sales numbers next month.
In the case of fixed income, the yield on benchmark bonds fell 12 basis points to 9.76%, hitting a five-week high over the weekend.