Rand Drops vs. Dollar Even as South African Central Bank Hike Rates

The South African rand dropped against the US dollar today even though the nation’s central bank increased its main interest rate, continuing with the hiking cycle.
The South African Reserve Bank hiked the repurchase rate by 25 basis points to 6 percent at today’s meeting. The central bank improved its outlook for this year’s inflation and economic growth, but also acknowledged risks associated with international developments (like the slowing growth in China) as well as with domestic power shortages. As for the rand, the statement said:

The rand exchange rate has been relatively volatile and depreciated significantly since the previous meeting of the MPC.

USD/ZAR gained from 12.4058 to 12.4243 as of 15:37 GMT today.

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