Rand Heads for Worst Quarter in Six Before Trade Deficit Report

The rand swung between gains and losses, set for its worst quarterly decline in six, after private-sector credit growth slowed in February and before a report that may show South Africa’s trade gap narrowing.

South Africa’s currency traded less than 0.1 percent stronger at 9.2502 per dollar as of 10:04 a.m. in Johannesburg, giving a decline this quarter of 8.4 percent, the most since the three months through September 2011, when it slumped 20 percent. The rand is the worst performer among emerging-market peers this year. Yields on benchmark 10.5 percent bonds due December 2026 dropped seven basis points, or 0.07 percentage point, to 7.41 percent, paring the rise this year to 12 basis points.

Growth in borrowing by households and companies eased to 7.9 percent in February, from 8.6 percent the month before, less than the 8 percent median estimate of economists in a Bloomberg survey. The monthly trade shortfall narrowed to 12.5 billion rand ($1.4 billion) in the month, from a record 24.5 billion rand, a report may show today, according to a separate survey.

“On the local front, the focus of market attention will be on the trade balance,” Bruce Donald, a strategist at Standard Bank Group Ltd. in Johannesburg, said via e-mail. “The lumpy and erratic nature of the data means there is considerable two- way market risk here.”

South Africa’s current-account gap reached 6.5 percent of gross domestic product in the fourth quarter, close to a four- year high, as mining strikes and slowing growth in Europe cut exports. The shortfall is undermining the rand and adding to price pressures in Africa’s biggest economy.

To contact the reporter on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net

To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net

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