Rand steadies against firmer dollar

The South African rand steadied in early trade on Wednesday, struggling for momentum as investors sought safety in the US dollar amid worries over global inflation.

At 0620 GMT the rand  traded at R15.65 against the dollar, largely unchanged from its previous close. The currency was set to take cues from global markets in the absence of domestic catalysts.

The dollar strengthened on Wednesday, buoyed by investor concern over the potential effects on global economic growth from interest rate increases likely to be needed to contain surging inflation.

The South African Reserve Bank last month unveiled its biggest rate increase in more than six years, citing fuel prices among risks to the inflation outlook. The government on Tuesday outlined new measures to curb steeply rising domestic fuel prices and ease pressure on consumers.

The government’s benchmark 2030 bond was weaker in early deals, with the yield up 1.5 basis points at 9.85%.