The South African Rand has squeezed out gains on Friday after the nation’s current account deficit unexpectedly narrowed in the first quarter of 2013 after exporters were helped by increased demand as a result of the weaker Rand.
According to the South African reserve bank the shortfall in South Africa’s current account fell to 5.8% of gross domestic product in the first quarter, down from the 6.5% seen in the last quarter of 2012. The data beat economist expectations that the current account deficit would widen to 7.05% in the first quarter.
A recent pick up in global economic activity in turn led to an increase in demand for South African exports. The current account gap, long a weak spot for the rand, could moderate further if the weaker currency leads to lower imports, senior Reserve Bank official Johan van den Heever said.
“On the basic expectation that with the lower exchange rate level there will be some moderation in imports, one would expect further decline in the deficit,” he said.
Also helping the Rand was the news that China quietly added liquidity to its market giving some support to commodity based currencies
“The Rand held up reasonably well after the Fed’s announcement but the reality is it we saw an extensive downward move in the lead up to the announcement,” William van Rijn, a trader at Nedbank.
“We expect a fairly sedate session today but the overall trend suggests we are most likely to see a gradual weakening of the rand.”
Current South African (ZAR) Exchange Rates
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The US Dollar/South African Rand Exchange Rate is currently in the region of: 10.2230
The Euro/South African Rand Exchange Rate is currently in the region of: 13.5096 >
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.4499 >
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 7.9539 <
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.8567 <
(Correct as of 12:25 pm GMT)
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