Rand on ropes over wide double deficits

Published Oct 1, 2014

Share

Johannesburg - South Africa's rand remained on the back foot against the US dollar on Wednesday, still spooked by data showing yawning trade and budget deficits.

South Africa's nagging twin deficits on the current account and the budget have earned the rand a spot among emerging market currencies most vulnerable whenever investors' appetite for risk wanes.

At 08:51 SA time the rand traded at 11.2900 to the dollar, not far off Tuesday's New York close of 11.2850.

Government bonds were also flat, and the yield for the 2026 instrument which the secondary market uses as a benchmark was quoted unchanged at 8.34 percent.

The rand had tumbled to a new 8-month low of 11.3490 to the greenback on Tuesday after the state revenue agency said South Africa's trade account recorded a 16.3 billion rand shortfall in August, its biggest gap in seven months.

Separate data from the National Treasury showed the budget deficit in the first five months of the 2014/15 financial year was 111.847 billion rand, up sharply from a 92.298 billion rand gap over the same period the previous year. - Reuters

Related Topics: