South African Rand rises to almost 13-month high, focus on local inflation

JOHANNESBURG (Reuters) – The South African rand rose to a nearly 13-month high on Monday, ahead of the release of domestic inflation data on Wednesday that could provide clues to the country's future interest rate path.

At 15:19 GMT, the rand was trading 0.7% higher against the dollar at 17.7375, a level not seen since late July 2023.

The dollar lost 0.46 percent against a basket of global currencies.

Investors will look to South Africa's inflation figures for July on Wednesday for clues about the central bank's future interest rate stance.

“Investors will be watching the number closely to see whether inflation eases sufficiently for the central bank to start cutting interest rates in September,” analysts at Rand Merchant Bank said in a research note.

According to a Reuters poll, economists expect the central bank to cut interest rates on September 19 for the first time in more than two years.

This week, global markets will focus on the release of minutes from a Federal Reserve meeting and central bankers' symposium in Jackson Hole, where Fed Chairman Jerome Powell will speak.

Like other risk-sensitive currencies, the Rand is often influenced not only by local factors but also by global factors, such as US monetary policy.

On the stock exchange, the top 40 index closed with an increase of 1.27 percent.

The South African benchmark 2030 government bond rose, while the yield fell 4.5 basis points to 9.275%.

(Reporting by Tannur Anders and Bhargav Acharya; Editing by Bernadette Baum and Alex Richardson)