Rand weakens on wide trade deficit

Comment on this story


NewRandMoney

Reuters.

Johannesburg - South Africa's rand softened against the dollar on Friday after the revenue service reported a wider-than-expected trade deficit for January, pointing to pressure on the current account in the first quarter of the year.

The trade balance swung into a deficit of 17.06 billion rand ($1.59 billion) in January, about double what economists had expected, after a 2.78 billion rand surplus in December.

The rand weakened against the dollar after the release, hitting a session low of 10.7500 against the dollar before pushing back slightly to 10.7350 by 18:15 SA time, down 0.4 percent from Thursday's close.

The deterioration in the trade number was partly a result of labour market disruptions in the mining and manufacturing sectors which had “severely undermined” South African exports, said Stanlib analyst Kevin Lings.

“Nevertheless, systematically higher world growth, coupled with sustained rand weakness and some improvement in labour market conditions ... should help lift South Africa's export performance this year and into 2015,” he added.

Government bond yields edged lower as foreign appetite returned to the market after an investor-friendly budget this week that sought to keep public spending in check.

Yields for the 2026 and 2015 bond, the market benchmarks, each dipped 2 basis points to 8.555 percent and 7.12 percent respectively. - Reuters


sign up
 
 

Comment Guidelines



  1. Please read our comment guidelines.
  2. Login and register, if you haven’ t already.
  3. Write your comment in the block below and click (Post As)
  4. Has a comment offended you? Hover your mouse over the comment and wait until a small triangle appears on the right-hand side. Click triangle () and select "Flag as inappropriate". Our moderators will take action if need be.

     

Join us on

IOL-Social networks IOL-Social networks IOL-Social networks IOL-Social networks

Business Directory