JOHANNESBURG - The rand rallied more than 1% to its firmest in nearly a week on Wednesday on optimism the central bank has room to boost the flagging economy after consumer inflation fell more than expected, while stocks gained.
A sharp slump in the rand, about 10% since the beginning of August, and fears of a global growth recession had all but extinguished the chances of a cut. With companies struggling to eke out profits as strained consumers cut spending and face a weak growth outlook and continued political uncertainty, monetary stimulus by a typically cautious central bank may be the only short-term solution the country has.
On the bourse, stocks strengthened amid positive risk sentiment as investors awaited the outcome of a meeting on U.S. interest rate cuts.