Rand firmer on rates decision

The rand firmed in reaction to a decision by the South African Reserve Bank's (SARB) Monetary Policy Committee (MPC) to leave the repo rate unchanged at 6.5%, testing 7.44 against the greenback in afternoon play.

At 3.37pm local time the rand was bid at R7.47 toe the dollar, R9.60 to the euro and R11.38 to the pound. The euro was bid at $1.2849 from $1.2767 overnight.

A local dealer said: "It is the first time in a long time that we have reacted to an MPC decision. The rand was at R7.53 just before the announcement by Governor Marcus. Offshore got caught long, with expectations for a rate cut. The result was the rand dipping under R7.50/$. If we break through R7.44/$ we should go even lower."

Dow Jones Newswires reports that the euro gained strongly against the dollar on Thursday as better-than-expected euro-zone economic data helped soothe investor sentiment that had been dented by Federal Reserve Chairman Ben Bernanke's day-earlier downbeat assessment of the recovery.