Rand at six-month high

By Mikhaila Crowie
19 March 2009

The rand is trading at firmer levels after it rose to a six-month high earlier today.

Analysts say the currency has been bolstered by expectations that the Reserve Bank could start trimming lending rates at a meeting of its Monetary Policy Committee which has been brought forward to Monday and Tuesday.

Some economists expect lending rates to fall by 100 basis points next week due to the pressure the slowing economy is exerting on businesses and consumers.

However the Congress of South African Trade Unions says the Reserve Bank seems to have heeded its warning about the impact the global economic slump is having on the South African economy.

In welcoming the bank’s decision to call an earlier meeting of its Monetary Policy Committee next week, Cosatu says it hopes the Reserve Bank will abandon its obsession with inflation-targeting.

The trade union federation wants a broader look at growth and employment as well as inflation. It has also called for a dramatic slashing of interest rates.