Cape Town - South Africa’s rand weakened for the first time in three days after manufacturing output rose at the slowest pace in five months, raising concern the current account will remain under pressure as exports wane.
Manufacturing growth slowed to 0.2 percent in August from 5.4 percent the previous month, Statistics South Africa said.
The median estimate in a Bloomberg survey of 11 economists was 1.2 percent.
South Africa’s central bank has left its benchmark repurchase rate at 5 percent since July 2012 to support growth even as inflation rose above its target limit.
“Today’s poor output figures indicate that the risk to growth prospects remains on the downside, but also suggest that a revival in exports is unlikely and therefore the current- account deficit is not expected to narrow significantly any time soon,” Nicky Weimar, an economist at Nedbank Group Ltd. in Johannesburg, said in an e-mail.
“Consequently, the rand will probably remain vulnerable.”
The rand depreciated 0.1 percent to 9.9700 per dollar as of 3:08 p.m. in Johannesburg.
Yields on benchmark 10.5 percent bonds due December 2026 dropped one basis point, or 0.01 percentage point, to 8 percent.
The current-account deficit widened to 6.5 percent of gross domestic product in the second quarter from 5.8 percent in the previous three months.
It will probably remain under pressure after the trade gap grew to 19.1 billion rand ($1.9 billion) in August, the biggest since January.
Mining output, which accounts for more than 50 percent of South Africa’s exports, climbed 2.1 percent in the year through August from 0.6 percent the previous month, a separate report showed.
The dollar climbed against all but three of its most-traded peers on signs of a compromise among US lawmakers that could avert an unprecedented default.
House Republican and Senate Democratic leaders in the US are open to an increase in the $16.7 trillion debt ceiling, according to congressional aides. - Bloomberg News