The Rand slumped to a four-year low against the US Dollar and remains vulnerable to further declines as investors continue to be worried over the state of South Africa’s budget and current account deficits. The currency was also weighed down after sales growth slowed to 4.3% in 2012 compared to 5.9% recorded in 2011.
The African currency hit levels last seen in April 2009 after the country’s Central Bank said that the nation’s current account shortfall was wider than had been anticipated and said that it expects the news to put further pressure upon the struggling Rand.
The Rand is very likely to continue to weaken or to at least remain range bound below the 9.17 mark. The Bank also warned that the current account deficit will cause the Rand to remain weak and stoke inflationary pressures which will reduce the chance of the bank cutting interest rates when its Monetary Policy Committee meets next week.
“Rand sentiment is negative at the moment, and momentum for the rand is lower, so the rand could still weaken further in the coming three months,” said Tradition Analytics in a note to clients.
“This should drive inflation expectations up and keep interest rate expectations rising too.”
Wednesday sees the release of the latest retail sales data which is one of only two economic indicators that have continued to post growth last year as consumer spending helped to limit the impact of the slowing economy. However, sales growth slowed to 4.3% for 2012 compared with 5.9% in 2011, in a sign that households are battling with high levels of debt and job insecurity as a quarter of the population remains without work.
Current ZAR Exchange Rates
The South African Rand to Euro exchange rate is currently trading at 0.0837
The South African Rand to US Dollar exchange rate is currently trading at 0.1090
The South African Rand to Pound Sterling exchange rate is currently trading at 0.0729
The South African Rand to Australian Dollar exchange rate is currently trading at 0.10579
The South African Rand to New Zealand Dollar exchange rate is currently trading at 0.1321
The South African Rand to Canadian Dollar exchange rate is currently trading at 0.1120
These exchange rates were correct as of 09:45 am GMT
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