For corporate South Africa, the tumbling rand has been both a blessing and a curse: a windfall for mining houses, it has saddled domestic manufacturers and retailers with higher costs and weaker consumer demand.

The currency free fall has left a raft of companies – including Vodacom and the local arm of Toyota – scrambling to contain the damage. The government says it may even need to step in to support drug makers.

For exporting mining companies such as AngloGold Ashanti and firms with extensive overseas revenue, such as media group Naspers, the weaker currency appears to be an unequivocal positive, boosting profits when overseas earnings are brought home.

Yet that’s just half the story, according to Dennis Dykes, the chief economist at Nedbank.

“Even on the export side, it leads to higher inflation, higher fuel costs and higher capital goods costs,” he said. “It’s not a complete no-brainer, even for the exporters.”

The impact is even worse for companies focused on the domestic economy, which are stuck with higher costs without the benefit of foreign exchange revenue.

Battered by the global retreat from emerging markets and worries about the fragility of the local economy, the rand hit a more than five-year low last month, even as the central bank raised its benchmark rate to 5.5 percent from 5 percent.

It is down about 8 percent this year, after an 18 percent slide last year.

Vodacom was negotiating with its global suppliers to bring down prices because of the weaker rand, chief financial officer Ivan Dittrich said last week.

The bulk of the cellphone company’s capital expenditure and a “meaningful” amount of its operating expenses, particularly network costs, were denominated in foreign currencies, he said.

“It’s a pity,” said chief executive Shameel Joosub. “Because obviously we could get more equipment if the rand was more stable.”

While Vodacom hedges its rand exposure and has some operations outside South Africa, it reaps more than 80 percent of its revenue from home, unlike rival MTN Group, whose vast African and Middle Eastern operations ensure a big lift from the weaker rand.

Adcock Ingram, a pharmaceutical group largely focused on the domestic market, has also been squeezed by a spike in expenses.

The country’s second-largest drug maker warned last month that first-half profits were likely to fall by at least 20 percent, citing pressure from inflation, including higher wages, and the increased cost of importing drug ingredients.

The rand’s fall could prompt Pretoria to raise the price caps it set for drugs, said Anban Pillay, a deputy director-general in the Department of Health.

“If the rand continues to slide, certainly the case for that becomes stronger and stronger,” he said, but declined to say how much the currency would have to decline to trigger an increase.

The last time the government allowed such a price hike was in 2008, when the rand tumbled by as much as 73 percent before finishing the year down by more than 50 percent.

Toyota South Africa was trying to balance higher costs with the need to remain competitive, something that was becoming increasingly difficult, chief executive Johan van Zyl said last week.

“This type of weakness we’ve seen over the last few months is so dramatic that it will definitely have an impact on vehicle pricing.”

Higher prices of cars, food, fuel and medicine are further bad news for South Africa’s debt-laden consumers, who now must also deal with the increase in interest rates.

Data in December showed that consumer spending in the third quarter grew by a lacklustre 2.3 percent, from 2.8 percent in the second quarter.

Household debt is equal to just over 75 percent of personal income, making shoppers, particularly lower-income ones, highly sensitive to any price rises.

That’s also bad news for retailers such as Shoprite and Walmart unit Massmart, which have seen their share prices knocked over the past six months on worries about consumer spending.

“We’ve gone and hiked interest rates in the hope that will stabilise the rand,” said Abri du Plessis, the chief executive at Gryphon Asset Management in Cape Town.

“But the only thing I can see that it is going to do is kill the economy even further.”