South African Rand May Show Modest Reaction to Rate Hike
South African Central Bank Likely to Raise Rates
South Africa's central bank is expected to raise interest rates on Thursday, but the rand's reaction may be muted. According to Commerzbank analyst Volkmar Baur, the market is pricing in about three rate hikes over the coming months, bringing the policy rate to 7.5% from the current 6.75%.
Structurally Right Signal for the Rand
Baur notes that a rate hike is structurally the right signal for the rand and demonstrates the central bank's commitment to its 3% inflation target. The policy decision is due at 1300 GMT. The dollar rose 0.4% to 16.4157 rand.
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