London - The rand weakened for the first time in five days, retreating from a four-week high, after South Africa’s current-account gap widened more than expected.
The deficit widened to 6.5 percent of gross domestic product in the second quarter from 5.8 percent in the first three months of the year, the Reserve Bank said in its Quarterly Bulletin, released today in the capital, Pretoria.
The median estimate of 15 economists surveyed by Bloomberg was 6.2 percent.
“Significant risks remain in place,” Razia Khan, head of Africa economic research at Standard Chartered Plc in London, wrote in an e-mailed note after the figures were announced.
“South Africa’s negative output gap remains in place, and is unlikely to dissipate soon.”
The rand dropped 0.5 percent to 10.0017 per dollar by 10:40 a.m. in Johannesburg, after reaching 9.9553 yesterday, the strongest closing level since August 12.
Yields on 10.5 percent bonds due December 2026 rose two basis points, or 0.02 percentage point, to 8.31 percent today.
South African exports have come under pressure amid a slump in demand from Europe and strikes in the nation’s mining industry that have disrupted output and undermined growth in the continent’s biggest economy.
That’s contributed to the rand’s 15 percent plunge against the dollar this year, the most among 24 emerging-market currencies tracked by Bloomberg. - Bloomberg News