The South African Rand has tumbled to a four-year low against the US Dollar due to mounting concerns that further labour unrest in the platinum mining sector could inflict further and wide reaching damage to the South African economy.
Calls for workers to stay away from working at Anglo Platinum mines was largely ignored on Friday as workers defied calls for protests over the company’s plans to cut 6,000 jobs in a bid to bring the world’s largest platinum producer back into profit. Violent protests cost mines 15 billion rand ($1.6 billion) in lost revenue last year and contributed to the rand’s 5.6 percent slide in the past six months.
Despite no incidents being reported on Friday the possibility for further strike action remains high as unions and worker committees remain opposed to the planned jobs cuts. Rand traders in particular are proving jittery over the situation.
“There is no doubt that the stories and rumours of strikes and union violence are the key factor of intraday volatility,” John Cairns a currency strategist at Rand Merchant Bank in Johannesburg, said in e-mailed comments. “Threats that the Fed could bring an early end to its quantitative-easing program are driving the Rand’s declining trend”, he said.
Investors are also worried about the large South African current account deficit and the possibility that the nations power grid could buckle under pressure. With the onset of winter not far away economists are concerned that the nation could be hit by blackouts, which would inflict further damage onto the economy.
“We continue to expect it to weaken to R9.60/$ over the coming months,” Barclays Capital said in a note. The currency remains vulnerable over the coming months due to lingering South Africa-specific risks, including a widening current account deficit and tight electricity supplies.”
Current South African Rand (ZAR) Exchange Rates
The South African Rand/US Dollar Exchange Rate is currently in the region of: 0.1073
The South African Rand/Euro Exchange Rate is currently in the region of: 0.0835
The South African Rand/Pound Sterling Exchange Rate is currently in the region of: 0.0705
The South African Rand/Australian Dollar Exchange Rate is currently in the region of: 0.1094
The US Dollar/South African Rand Exchange Rate is currently in the region of: 9.3173
The Pound Sterling/South African Rand Exchange Rate is currently in the region of: 14.1694
The Euro/South African Rand Exchange Rate is currently in the region of: 11.9745
The Australian Dollar/South African Rand Exchange Rate is currently in the region of: 9.1381
(Correct as of 10:25 am GMT)
Comments are closed.