Rand firmer after Sarb holds lending rate

Johannesburg - The rand gained against the dollar on Friday following a decision by the South African Reserve Bank (Sarb) to leave interest rates unchanged, indicating that any possible cuts would depend on further falls in consumer inflation.

The local currency traded between ranges, slipping toward seven-day lows early in the session before gaining after the central bank's monetary policy committee said the bar for further accommodation remained high.

By 08:20 the rand had firmed 0.21% to R11.5300/$, holding steady with the resistance level below R11.5000 in sight despite dollar momentum after US unemployment claims dropped to near 15-year lows.

"The position of the Sarb can be considered as prudent as one could have hoped for in the face of mounting global pressure to ease monetary policy.

Government bonds remained firm, with the yield on the highly-traded paper due in 2026 dropping 2 basis points to 7.04%, extending a 20-month low.

A slew of domestic data releases in upcoming days looks set to stoke rand volatility and temper liquidity, with traders expecting December trade figures due on Friday at 14:00 to pressure the rand should the data reveal a widened deficit.