Rand holds on to gains after lending rate hike

The rand rose in early trade on Friday, holding on to gains made in the previous session after the central bank announced its biggest rise to the main lending rate in more than six years to rein in inflation.

The US dollar’s retreat from two-decade highs has also supported the rand this week.

At 0600 GMT, the rand traded at R15.83 against the dollar, up 0.27% from its previous close, staying close to two-week highs touched on Thursday.

The South African Reserve Bank’s Monetary Policy Committee increased the repo rate by 50 basis points to 4.75% on Thursday, as it stepped up efforts to fight inflation.

Consumer inflation was running at 5.9% in annual terms in March and April, near the top of the central bank’s 3%-6% target range, driven by higher fuel and food prices linked to the war in Ukraine.