JOHANNESBURG, Nov 20 (Reuters) - South Africa's rand slipped on Wednesday against a buoyant dollar, despite inflation dropping to its lowest level in more than four years, and as investors geared up for a policy announcement by the central bank on Thursday.

At 1501 GMT, the rand traded at 18.1350 against the dollar , about 0.5% weaker than its previous close.

Trade in the local currency has been volatile as investors sought safe-haven assets amid escalating tensions between Russia and Ukraine and as the dollar benefited from Donald Trump's U.S. election win.

October inflation cooled to 2.8% from 3.8% in September (ZACPIY=ECI) , opens new tab, Statistics South Africa data showed on Wednesday, one day before the South African Reserve Bank will announce its final monetary policy decision for the year.

Inflation has only been below 3% in a handful of months in the past two decades. The SARB aims for the 4.5% level, the midpoint of its 3% to 6% target range.

Economists polled by Reuters expect the central bank to reduce the repo rate by 25 basis points on Thursday.

"With South Africa's inflation falling to 2.8%, its lowest since June 2020, expectations for a 50 basis points cut by the SARB have increased, heightening the rand's vulnerability," said Zain Vawda, market analyst at MarketPulse by OANDA.

On the Johannesburg Stock Exchange, the blue-chip Top-40 index (.JTOPI) , opens new tab closed about 0.8% up.

South Africa's benchmark 2030 government bond was stronger, with the yield down 6.5 basis point to 9.045%.

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https://www.reuters.com/markets/currencies/south-african-rand-slips-inflation-fall-drives-bigger-rate-cut-optimism-2024-11-20/