South African Rand Weaker

The South African rand traded slightly lower around 18.6 per USD, as the greenback firmed following hawkish remarks from a Federal Reserve official.

Minneapolis Fed President Neel Kashkari said the central bank will likely keep interest rates where they are “for an extended period of time” until officials are certain inflation is on track to their target.

Domestically, the South African Reserve is anticipated to maintain interest rates higher for longer, as risks to the inflation outlook remain on the upside, especially ahead of May 29th elections.

The central bank held at 8.25% for a fifth consecutive policy meeting in March and adopted a more hawkish tone.

The headline inflation remains closer to the upper band of the SARB target than the mid-point at 5.3% in March.

Governor Lesetja Kganyago expects inflation to reach the 4.5% mid-point of the target by the end of 2025.