South Africa's rand firms as central bank holds rates, stocks rise

South African Rand coins are seen in this illustration picture taken October 28, 2020. Reuters/Mike Hutchings/Illustration

At 1517 GMT, the rand was 0.92% firmer at 13.9625 against the dollar.

The South African Reserve Bank left its repo rate unchanged at 3.5% in a unanimous decision on Thursday, saying the current lending rate was supportive of the economic recovery.

However, it warned that upside inflation risks were beginning to emerge.

"Despite a unanimous 5-0 vote to keep the repo unchanged, the hawkish tilt – important when it becomes necessary to raise rates – should not be dismissed," said Razia Khan, chief Africa economist at Standard Chartered.

Headline consumer price inflation increased to 4.4% year-on-year in April, a touch shy of the mid-point of the bank's target range of 4.5%, and its highest level since February last year, data showed on Wednesday.

On the bourse, the benchmark all-share index closed up 0.41% at 66,124 points, while the blue-chip index of top 40 companies ended up 0.49% at 60,068 points.

Among the gainers, bourse heavyweight Naspers gained 1.94% after Tencent, which it holds a stake in, firmed after reporting a forecast-beating 65% rise in quarterly profit.

Banking shares were also firmer, up 1.1%, with FirstRand closing up 1.79%.

Bonds firmed, with the yield on the benchmark 2030 government issue down 8.5 basis points to 9.040%.