South African rand on backfoot ahead of rate decision, data

South African Rand coins are seen in this illustration picture taken October 28, 2020. REUTERS/Mike Hutchings/Illustration/File Photo

JOHANNESBURG (Reuters) – South Africa’s rand edged lower against the dollar early on Monday, as traders gauge an eventful week that will host the release of inflation data and the central bank’s first rate decision of the year.

At 0620 GMT, the rand traded at 19.0600 against the dollar, about 0.1% weaker than its previous close.

The dollar was down about 0.09% against a basket of global currencies.

The rand fell sharply last week and has yet to claw back lost ground, as the greenback firmed after investors lowered their expectations of a March rate cut by the Federal Reserve.

Statistics South Africa will release consumer and producer price inflation figures for December this week, ahead of the South African Reserve Bank’s (SARB) rate decision on Thursday.

SARB governor Lesetja Kganyago has said he wants to see inflation decline sustainable to the 4.5% mark before considering rate cuts. Consumer inflation was at 5.5% in November and is expected to average 5% in 2024.

South Africa’s benchmark 2030 government bond was flat in early deals, with the yield at 9.765%.

(Reporting by Nellie Peyton; Editing by Sherry Jacob-Phillips)