The South African Rand fell by 1% against the Pound as data from Africa’s largest economy showed that its current account deficit widened and as positive construction data from the UK boosted demand for Sterling.
According to the South African Reserve Bank the nation’s current account deficit widened to 6.8% of GDP in the third quarter, the largest gap recorded in five years. The disruption to major industries including mining and automobile manufacturing from worker unrest and strike action was blamed as a major factor for the widening deficit. A decline in global demand for South African goods and the weak Rand raising the cost of imports were also major factors.
The gap grew to an annualised 232.7 billion Rand far higher than the previous revised figure of 197.0 billion Rand and was higher than the forecast for a widening to 207.9 billion Rand.
“If it were not for the revision in the previous quarter, the deficit would have been 7.4%; we need ever-increasing financing to fund our external imbalances, which is a worry. It’s an ongoing symptom of the mismanagement of the country,” said an economist at Vunani Securities Ltd in an interview with Bloomberg.
As a result of the data the Rand tumbled against the US Dollar, Euro and other major peers.
The Rand received a further knock against the Pound after the release of the latest Markit Economics index of construction. The PMI rose to 62.6 in November, beating October’s figure of 59.4 and came in higher than forecasts for a decline to 59. Residential construction growth hit its highest level in 10-years.
Current South African (ZAR) Exchange Rates:
The US Dollar/South African Rand Exchange Rate is currently in the region of: 10.3448
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 16.9719
The Euro/South African Rand Exchange Rate is currently in the region of: 14.0359
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.4384
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 8.5060
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.7201
(Correct as of 10:20 am GMT)
Comments are closed.