SARB's Surprise Decision Sends Rand Reeling

South Africa's central bank, the SARB, surprised markets by keeping its policy rate unchanged at 7% in its latest decision. The move came after June inflation rose and Brent crude prices surged above $100 per barrel.

Volkmar Baur from Commerzbank noted that the decision was a negative surprise, as many had expected a rate hike. This lack of action triggered a sharp sell-off in the rand, which lost over 2% against the US Dollar.

The central bank's statement failed to mention further rate hikes, citing an improved inflation picture. However, Baur pointed out that this was at odds with current conditions, particularly with oil prices above $100 per barrel. He noted that 'it was as if they hadn't noticed the roughly 10% rise in oil prices over the last two days alone.'

The rand's weakness is a concern for markets, and Baur warned of further potential losses.