JOHANNESBURG - South Africa’s rand fell again early on Friday, reaching a new 2019 low as assurances by the ruling African National Congress about the independence of the central bank did little to ease nerves about economic policy.
At 0640 GMT, the rand was 0.63% weaker at 15.0900 per dollar, bring losses since Monday to nearly 5% as a public spat among senior ANC officials over the Reserve Bank’s mandate added to the bad news of a contraction to the economy. The row has exposed deep divisions within the ANC. A group loyal to President Cyril Ramaphosa opposes calls from a rival faction for the bank to do more to boost employment and kick-start growth in the country’s ailing economy.
Data on Tuesday showed first-quarter growth contracted 3.2%, the most in a decade, almost immediately followed by the ANC’s announcement that it wanted the bank to consider quantitative easing to lower government debts, sending the rand crashing. A U.S. jobs report due later is expected to support the case for an interest rate cut by the Federal Reserve. Emerging- market currencies would benefit as yield-hunting investors looked for higher returns.
Bonds were also weaker, with the yield on the 10-year government bond at 8.535%.