Johannesburg - The rand slid for a fourth day and headed for its longest losing streak in almost two months against the dollar as South African companies demanded foreign currency to pay for imports in the continent’s biggest economy.
The deficit on South Africa’s current account, the broadest measure of trade in goods and services, will probably be 6.3 percent of gross domestic product in the three months through September, according to the median estimate of five economists surveyed by Bloomberg from September 20 to September 25.
That’s wider than the estimate in last month’s survey of 5.9 percent.
The gap was 6.5 percent in the quarter through June.
“There is unbelievable corporate demand for foreign currency at this stage,” Ion de Vleeschauwer, the Johannesburg-based chief dealer at Bidvest Bank, said by phone.
“There aren’t enough exports. It is month-end demand.”
The rand weakened 0.8 percent to 10.0677 per dollar by 10:05 a.m. in Johannesburg, extending its slide this year to 15 percent, the worst performer among 16 major currencies tracked by Bloomberg.
Yields on rand-denominated government debt due December 2026 rose three basis points, or 0.03 percentage point, to 7.99 percent.
The country’s trade balance for August will be announced on September 30 after a deficit of 14.2 billion rand ($1.4 billion) was reported for July.
South Africa has the world’s largest-known reserves of platinum, used in the automotive-manufacturing industry, and chrome.
It’s the world’s sixth largest gold producer.
Metal exports contributes more than 50 percent to foreign exchange earnings, according to the government.
“The rand has a negative outlook,” De Vleeschauwer said.
“We’ll be trading weaker next week; 10.20 per dollar will probably be on the cards.” - Bloomberg News