Rand at six-week low on Amplats closures

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IOL world currency1 Graphic: Renjith Krishnan.

The rand slid to its weakest level to the US dollar in about six weeks on Wednesday‚ as the fallout from Anglo American Platinum’s (AMS‚ Amplats) decision to restructure its Rustenburg operations weighed on market sentiment.

The local currency also lost ground against major crosses.

At 8.52am‚ the rand was bid at R8.8532 to the US dollar from R8.8048 at Tuesday’s close. The local currency was bid at R11.7660 to the euro from its previous close of R11.7112 and at R14.1976 against sterling from R14.1474 before.

The euro was bid at $1.3291 from Tuesday’s close of $1.3309.

“The rand lost ground across the board on Tuesday‚ and we would not be surprised if it continued to weaken to 8.90/USD over the coming days. Proposed job losses within the platinum sector are at the heart of the latest wave of rand bearishness‚” Absa Capital analysts said in a note.

“Platinum miners have downed tools in response to the announcements of job cuts‚ which implies that export volumes of SA’s single largest exported good could be squeezed – as represented by the three-month-high platinum price.”

Anglo American Platinum has faced a backlash against its plans to cut as many as 14‚000 jobs by mothballing shafts‚ suspending processing plants and flagging the sale of a mine‚ with the African National Congress calling for the surrender of its mining licence. - I-Net Bridge

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