JOHANNESBURG: The South African rand was stable in early trade on Thursday, retaining previous gains sparked by Finance Minister Enoch Godongwana’s announcement of a lower inflation target.
At 0608 GMT the rand traded at 17.0775 against the dollar, a whisker away from its previous close.
The local unit gained about 0.4% on Wednesday after Godongwana lowered the country’s inflation target for the first time in 25 years to 3% with a 1 percentage point tolerance band either side, from a range of 3-6% previously.
“This is a welcome development that not only supports poor households but also assists in improving fiscal outcomes via lower borrowing costs,” said economic analyst at ETM Analytics Lindi Geldenhuys.
While investors continue to weigh the short to long-term effects of the decision, focus will pivot to September mining data at 0930 GMT.
Production fell 0.2% year-on-year in August, with Reuters economists estimating a 0.4% decline this time around, as operating conditions remain challenging in the industry.
South Africa’s benchmark 2035 government bond was weaker in early deals, as the yield rose 2 basis points to 8.68%.
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