The South African rand opened the week on a stable footing in early Monday trading, as investors turned their focus to the South African Reserve Bank’s (SARB) upcoming interest rate announcement, expected to be the week’s main economic event.
As of 06:58 GMT, the rand was trading at 17.82 against the U.S. dollar, holding firm at the same level as Friday’s close.
The SARB is scheduled to deliver its monetary policy decision on Thursday, after pausing its rate-cutting cycle in March. The pause was attributed to mounting risks from global trade tensions, particularly those linked to U.S. President Donald Trump’s trade policies, as well as unresolved fiscal challenges at home.
According to a Reuters poll of economists, the central bank is widely expected to resume its easing cycle, with a 25 basis point cut to the repo rate, lowering it to 7.25%.
Supporting the case for a rate cut is South Africa’s subdued inflation rate, which remained below the central bank’s target range of 3% to 6%, coming in at just 2.8% year-on-year in April.
There had been market speculation that Finance Minister Enoch Godongwana might unveil a new, lower inflation target in his recent budget speech. However, the absence of any announcement on the matter could give the SARB’s Monetary Policy Committee further latitude to ease interest rates.
In addition to the rate decision, markets are watching several key domestic data releases this week. On Tuesday, South Africa’s leading business cycle indicator is due. Thursday will bring the latest producer inflation figures, and on Friday, data covering private sector credit extension, trade balance, and budget performance will be released.
In the bond market, the yield on South Africa’s benchmark 2030 government bond edged slightly lower in early trading, down 1.5 basis points to 8.87%, reflecting limited movement as investors await Thursday’s policy signal.
