The South African Rand plummeted to a four-year low against the US Dollar on Thursday after wage talks in the gold mining sector stalled and the country’s biggest mining union announced that it is planning to ask members to vote on taking strike action.
Six weeks of talks between the unions and South African gold producers failed to end the impasse over worker wages and sent investors running to safe havens as fears grow that strike action is now inevitable. Mine stoppages are expected to inflict huge damage to Africa’s largest economy which according to data is losing up to $60 million a day to a strike being held by 30,000 workers in the car manufacturing sector.
The wage dispute has seen the National Union of Mineworkers (NUM) which represents up to 64% of the country’s 140,000 gold miners, seek a basic wage for entry-level workers of 8,000 Rand (£500) a month, a 60% rise.
“We’ve got such bad labour issues at the moment. Unemployment continues to get worse,” said an FX trader.
“The Rand will weaken…slightly more than other currencies against the dollar because of the fundamentals – labour strikes across the board and the general bad news that continues to circulate.”
This latest labour dispute adds to the African economy’s problems. Data released on Wednesday showed that consumer inflation accelerated to 6.3% on a year-by-year basis in July, breaching the South African Central Banks target region. The Rand was also weighed down by the release of the US Federal Reserve policy meeting minutes for July; the report showed that most policy makers are in favour of tapering bond buying next month.
Current South African (ZAR) Exchange Rates:
The US Dollar/South African Rand Exchange Rate is currently in the region of: 10.3230 >
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 16.0864 >
The Euro/South African Rand Exchange Rate is currently in the region of: 13.7812 >
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.3072 >
The New Zealand Dollar/South African Rand Exchange Rate is currently in the region of 8.1033>
The Canadian Dollar/South African Rand Exchange Rate is currently trading in the region of 9.8514 >
(Correct as of 10:10 pm GMT)
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