More trouble for the rand
The local currency is trading at around 13,63 to the dollar.
JOHANNESBURG - The rand has come under renewed pressure following the news that business confidence has fallen to its lowest level in more than 16 years.
The South African Chamber of Commerce and Industry (Sacci) says its index fell to 84,3 for August; that's down from 87,9 the month before.
The local currency is trading at around 13,63 to the dollar falling more than one percent after Sacci's latest figure.
Sacci says the present slow growth of 1,2 percent for the second quarter of this year is a major concern.
Its red-flagged labour disputes and slowing Chinese demand for commodities could push the country towards recession.
On the other hand, rating agency Moody's stated yesterday that the country was unlikely to fall into a recession or be downgraded over the next 12 to 18 months.
However, there is general agreement that the electricity crisis, drought, low commodity prices and weaker than expected global growth will ultimately affect the local economy.
SACCI: RAND HAS BEEN SUFFOCATING
Sacci says the rand has been suffocating on the currency markets due to uncertainty about the economy.
The chamber says the business confidence index dropped to 84,3 in August its lowest level in 16 years.
This has put the rand under pressure again with the local currency now at around 13,55 to the dollar.
Sacci says its business confidence index has declined by 8,5 percent since February due to a number of factors, which include subdued domestic economic performance and financial market nervousness.
Sacci economist Richard Downing says this has affected growth.
"In the second quarter we must grow nearly as the rate we would like to see; 1,20 year on year which is not nearly enough."
He says growth is nowhere near where it should be.
"It's between 1,5 and 2 percent is where we will end up."
The rand has been hit hard by today's business confidence figure after recovering slightly over the past few days.