Rand's steep fall spurs jitters

2013-06-10 13:19

The steep fall of the rand deepened today, with the South African currency losing 1.7% of its value against the dollar in early trading.

The dollar was trading at R10.18, close to recent four-year lows of R10.28.

The currency of Africa’s largest economy has lost nearly 20% of its value against the greenback in the last year, with the weakening speeding up dramatically since May.

Standard Bank currency analyst Bruce Donald blamed the rand’s slide on “a cocktail of adverse global and domestic developments”.

The strengthening of the US dollar has bit into emerging market currencies, the rand included.

But concerns about South Africa’s mining sector, a fragile public budget and doubts over the future of a government plan to reinvigorate the economy have all taken their toll.

Sentiment was also weakened early on Monday by news that the European Union may block some South African exports amid allegations and counterallegations of poor phytosanitary standards and protectionism.

Now concerns are growing that the weakening rand may push growth below 2% for the year, at a time when most African economies are posting stellar growth.

With South Africa heavily dependent on imports, any weakening of the currency risks fuelling already high inflation.

Business Day today declared the country was approaching a “tipping point”.

“Foreign investors are starting to vote with their feet, as the bond market sell-off and sharp depreciation of the rand so clearly illustrate,” the paper said in an editorial comment.

South Africa’s central bank governor on Thursday called for strong government leadership to steer Africa’s largest economy from a prolonged slump.

“Much more important than the precise elements of a strategy is for government to be decisive, act coherently and exhibit strong and focused leadership from the top,” said SA Reserve Bank Governor Gill Marcus.

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.