Africa

South African rand gains as central bank holds rates

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A South African Rand is seen in this illustration picture taken October 30, 2020. REUTERS/Mike Hutchings/File Photo

JOHANNESBURG, Sept 23 (Reuters) - South Africa's rand gained strongly on Thursday, as the dollar fell on global markets and the central bank held its main interest rate at a record low.

At 1510 GMT, the rand was trading at 14.6700 against the dollar, around 1.1% firmer than its previous close.

Although the South African Reserve Bank's (SARB) decision to keep its repo rate on hold at 3.5% (ZAREPO=ECI) was expected, some traders took the implied rate path in the bank's Quarterly Projection Model as a sign that the scales were tipping towards a future rate hike.

Carmen Nel, economist and macro strategist at Matrix Fund Managers, said in a research note that the Monetary Policy Committee's (MPC) statement was hawkish enough to keep the door open should the SARB need to act soon.

The safe-haven dollar (.DXY) was down 0.5% against a basket of peer currencies, as risk sentiment improved globally.

Johannesburg-listed stocks rose, with the All-share index (.JALSH) ending up 1.1% at 64,049 points and the Top-40 index (.JTOPI) closing up 1.2% at 57,643 points.

The government's benchmark 2030 bond fell, with the yield rising 6 basis points to 9.145%.

Reporting by Olivia Kumwenda-Mtambo and Alexander Winning; Editing by Nick Macfie

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