Dennis Dykes, at the Nedbank Group Economic Unit, reports that the rand firmed marginally against the US dollar and the British pound towards the end of the previous week, following the release of higher local inflation numbers and a hawkish comment by the Reserve Bank Governor Tito Mboweni, which raised speculation that the MPC will hike interest rates in its April meeting.
Stronger precious metal prices and a weaker US dollar also supported the local unit. The rand closed at R8,13 against the US dollar on Friday from R8,17 on the previous Thursday, 20/03/08 and ended almost unchanged at R16,20 against the British pound from R16,21 on 20/03/08.
However, the unit weakened to R12,85 against the euro from R12,60 on 20/03/08. The local bond market weakened over the week on expectations of an interest rate increase. The yields on the R153 2010 and R157 2015 rose to 9,71% and 9,22% at the end of the week from 9,65% and 9,20% on 20/03/08, while the yields on the 3- and 5-year BESA actuaries increased to 9,53% and 9,31% respectively from 9,49% and 9,29%. The yield on the 10-year BESA actuary was steady at 9,18%.