South African rand tracks dollar, unmoved by Putin’s BRICS no-show

By Tannur Anders, Anait Miridzhanian

JOHANNESBURG (Reuters) -The South African rand slipped against a stronger U.S. dollar on Wednesday, showing little reaction to the news that Russian President Vladimir Putin will not attend a summit of the BRICS nations next month in Johannesburg.

The announcement that Putin would not be at the summit ended months of speculation about whether South Africa would arrest him because of a warrant issued by the International Criminal Court.

The rand also reacted little to data showing local inflation fell more than expected in June, to a 20-month low, with traders likely holding off from big bets before an interest rate announcement on Thursday.

At 1510 GMT, the rand traded at 17.9500 against the dollar, around 0.4% weaker than its previous close. The dollar was up about 0.4% against a basket of currencies.

Consumer inflation slowed to 5.4% year-on-year in June from 6.3% in May, below a Reuters consensus forecast of 5.6% and within the central bank’s target range of 3% to 6% for the first time since April 2022.

Easing price pressures bolster the case for the central bank to keep its main interest rate steady on Thursday after 10 hikes in a row, which is already what most economists have predicted.

Casey Delport, an investment analyst at Anchor Capital, said markets were in a ‘wait and see’ phase.

Anchor Capital is among a minority that expects the South African Reserve Bank (SARB) to raise rates by 25 basis points on Thursday. It cites inflation expectations still exceeding the bank’s preference among reasons for its prediction.

Data on Wednesday also showed South African retail sales fell 1.4% year-on-year in May after declining by a revised 1.8% in April.

The Johannesburg Stock Exchange’s blue-chip Top-40 index was last flat on its previous close. South Africa’s benchmark 2030 government bond was marginally firmer, as the yield fell 1.5 basis points to 10.310%.

(Reporting by Tannur Anders and Anait Miridzhanian; Editing by Alexander Winning, Barbara Lewis and Jonathan Oatis)