Rand firms as commodity prices recover

July 21, 2015 1:57 PM

Investors also waited the release of South Africa's June consumer inflation data, due out on Wednesday, for clues on whether the central bank will hike lending rates or not.

South African bank notes featuring images of former South African President Nelson Mandela (R) are displayed next to the American dollar notes in this photo illustration in Johannesburg August 13 2014. REUTERS/Siphiwe Sibeko

South Africa's rand strengthened against the dollar on Tuesday supported by a recovery in commodity prices and as the greenback paused its recent rally against a basket of currencies.

At 1435 GMT, the rand was trading 0.59 percent firmer at 12.3615 to the dollar compared with its closing level on Monday.

The dollar was down 0.52 percent against a basket of major currencies.

"The dollar is weaker and we have seen commodities lifting a tad, so that is helping the currency," Bidvest Bank chief dealer Ion de Vleeschauwer said.

"But it is still very much a wait and see scenario in terms of interest rates later this week. It's going to be nervous markets up until Thursday."

South Africa's Reserve Bank (SARB) begins its three day monetary policy meeting on Tuesday, with 17 of 32 economists polled by Reuters last week expecting the bank to lift lending rates when it announces its decision on Thursday.

In fixed income, the yield for the 2026 benchmark added 1.5 basis points to 8.165 percent.