South Africa’s Current Account Gap to Ease: Gordhan

South Africa’s current-account deficit, which has fueled a slump in the rand, is set to narrow, Finance Minister Pravin Gordhan said.

The shortfall “is watched carefully,” Gordhan, 64, said during a lecture at the University of Johannesburg today. “There will be a return to normality.”

The deficit on the current account, the broadest measure of trade in goods and services, narrowed to 6.5 percent of gross domestic product in the fourth quarter from 6.8 percent in the previous three months, the central bank said on March 12. The rand has slumped 6.7 percent against the dollar this year, the worst performer of 16 major currencies tracked by Bloomberg after the Japanese yen.

Exports have come under pressure since last year because of slower global growth and mining strikes. South Africa relies on foreign investment in stocks and bonds to fund the current- account gap, inflows that have fluctuated as investors’ risk perception increased.

To contact the reporters on this story: Jaco Visser in Johannesburg at avisser3@bloomberg.net; Amogelang Mbatha in Johannesburg at ambatha@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

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