#RandReport: Rand softer on current account data, stocks down
South Africa’s current account deficit widened to the equivalent of 2.4% of GDP as an increased trade surplus was offset by a larger shortfall on services, income and current transfer payments.
JOHANNESBURG - The rand eased on Thursday to three-week lows after data showed the current account deficit widened in the second quarter, while mining shares weighed on the bourse.
South Africa’s current account deficit widened to the equivalent of 2.4% of GDP as an increased trade surplus was offset by a larger shortfall on services, income and current transfer payments, a bigger shortfall than the 2% expected by economists.
The rand at 1503 GMT was 0.2% weaker at R13,1875/dollar.
Some relief for the rand could come from a surplus in South Africa’s trade account, Kevin Lings, chief economist at Stanlib, said in a note.
“As always, however, domestic political risks intertwined with the ongoing risk of further credit rating downgrades coupled with changes in global risk appetite are likely to keep the Rand volatile over the short to medium term,” he said.
”In fixed income, the yield for the benchmark government due in 2026 was 2 basis points lower at 8.42%.
Stocks also eased, with Impala Platinum sliding over 6.5% after it reported a 2017 loss after writing off part of the value of a deal a decade ago that helped the miner meet a target for black ownership.
The blue-chip JSE Top-40 index was off 0.54% at 49,514 and the broader All-share index fell by the same margin to 55,850.
PPC bucked the downward trend, closing 4.7% higher at R6.24 after Nigeria’s Dangote Cement said it’s in preliminary talks with the cement producer about a takeover offer.