The rand is flat in early trade on Tuesday as traders eye a possible deal at Lonmin and the MPC meeting for direction.

"The rand exhibited a lot of indecision on Monday due to the lingering uncertainty surrounding the mining situation. Indeed, the fact that the local unit finished the day around the same levels as the start of the trading day clearly highlights that participants remain unsure," Absa Capital said in its morning report.

At 8.38am, the rand was bid at R8.2564 to the dollar from R8.2564 at Monday's close. It was bid at R10.8005 to the euro from its previous close of R10.8288 and at R13.4012 against sterling from R13.4130 before.

The euro was bid at $1.3089 from $1.3114 at Monday's close.

"Reports surfaced that Lomin workers may be on the brink of striking a deal, but until there is something more definitive rand participants are likely to remain on the sidelines," it said.

"Participants might also be keen to stay on the sidelines until Thursday's MPC policy statement,so in essence we may have very little conviction in rand until later in the week," Absa Capital said.

The MPC begins its three day meeting today, with the decision on interest rates expected shortl;y after 3.00pm on Thursday.

The repo rate is expected to remain unchanged at 5.0 percent according to a survey of twelve leading economists by I-Net Bridge.

Of the 12 economists surveyed, only two forecast a 50 basis point rate cut on the cards. The repo rate was reduced by 50 basis points to 5.0 percent in July.

Bonds defensive ahead of auction

The South African bond market was in defensive mode in early trade on Tuesday ahead of the weekly bond auction at 11am.

The National Treasury is offering R600m of the R2023 bond, R900m of the R214 bond and R600m of the R2048 bond.

At 8.53am, the benchmark R157 bond was trading at 5.510 percent from 5.490 percent at Monday's close and 5.540 percent at Friday's close. The R207 was bid at 6.590 percent and offered at 6.570 percent from Monday's close of 6.565 percent, and the R186 was trading at 7.620 percent from 7.590 percent at its previous close.

The rand was bid at R8.2355 from Monday's close of R8.2564 and Friday's close of R8.1978.