The South African currency lost traction ahead of the Sarb’s decision to maintain the benchmark interest rate at a record low of 3.5 percent according to NKC Research.
In a clear bias towards a more dovish stance, two of the five MPC members voted for another rate cut of 25 bps, which would have taken the cumulative reduction this year to 325 bps.
The rand remained within a state of cautious trade ahead of looming rating decisions, both S&P Global Ratings and Moody’s Investor’s Service are scheduled to release credit rating reviews on the country today.
While S&P currently has South Africa on a stable outlook on its BB- rating, a bypass on an outlook change to execute a one-notch downgrade to may trigger rand losses.
At the close of local trade, the rand quoted weaker at R15.52/$, after trading in range of R15.43/$ – R15.58/$.
Brent crude oil
The Brent oil price traded on the back foot yesterday as rising coronavirus infections and tighter economic restrictions across Europe and the US weighed on fuel demand prospects. At the close of local trade, benchmark Brent crude futures quoted 1.16 percent lower at $44.20pb.