South African rand edges lower after budget balance, money supply

JOHANNESBURG (Reuters) -South Africa's rand edged lower on Tuesday after local budget balance and money supply figures, as investors braced for the Federal Reserve's monetary policy decision later this week.

At 1605 GMT, the rand traded at 18.8500 against the dollar, about 0.2% weaker than its previous close.

The dollar index was last up 0.05% against a basket of currencies.

Global attention this week is on the U.S. central bank's interest rate decision on Wednesday, at which it is expected to leave rates unchanged. Investors will focus on any clues about the likelihood of a rate cut in March.

South Africa's budget surplus decreased to 19.47 billion rand ($1.03 billion) in December from 44.97 billion rand in the same month a year earlier, National Treasury data showed.

However, growth in money supply and credit extension ended the year stronger than expected, said Nedbank Group Economic Unit.

M3 money supply growth accelerated to 7.63% year-on-year in December, and credit growth accelerated to 4.94% year-on-year, central bank figures showed.

On the stock market, both the Top-40 index and the broader all-share closed about 0.3% higher.

South Africa's benchmark 2030 government bond was weaker, with the yield up 1.5 basis points to 9.780%.

($1 = 18.8565 rand)

(Reporting by Bhargav Acharya and Nellie Peyton;Editing by Andrew Cawthorne and Christina Fincher)