South African rand on back foot ahead of rate decision, data

JOHANNESBURG (Reuters) -South Africa’s rand weakened against the dollar on Monday, as traders prepare for an eventful week where inflation data and the central bank’s first rate decision of the year are on the agenda.

At 1516 GMT, the rand traded at 19.1575 against the dollar, 0.64% weaker than its previous close.

The dollar was down about 0.12% against a basket of global currencies.

The rand fell sharply last week and has yet to claw back lost ground, as the U.S. currency firmed after investors lowered their expectations of a March interest rate cut by the U.S. Federal Reserve.

Statistics South Africa will release consumer and producer price inflation figures for December this week, ahead of the South African Reserve Bank’s (SARB) rate decision on Thursday.

SARB governor Lesetja Kganyago has said he wants to see inflation decline sustainably to the 4.5% mark before considering rate cuts. Consumer inflation was at 5.5% in November and is expected to average 5% in 2024.

Shares on the Johannesburg Stock Exchange fell, with the blue-chip Top-40 index ending 0.48% lower.

South Africa’s benchmark 2030 government bond was stronger, with the yield down 5 basis points at 9.715%.

(Reporting by Nellie Peyton with additional reporting by Bhargav Acharya; Editing by Sherry Jacob-Phillips and Jane Merriman)