Rand Drops in Longest Quarterly Run in 12 Years on U.S. Concern

South Africa’s rand weakened, extending a stretch of quarterly losses against the dollar, as the U.S. government’s potential for its first partial shutdown in 17 years weighed on riskier assets.

Congress has one day to end a budget stalemate that raises the risk that 800,000 federal workers will be sent home if Republicans and Democrats fail to pass a stopgap spending bill before funding expires. South African credit growth accelerated more than estimated in August, a report today showed.

“The likely shutdown of the U.S. government will continue to weaken the rand,” John Cairns, a currency strategist at FirstRand Ltd. (FSR)’s Rand Merchant Bank, said in an e-mailed note.

The rand dropped less than 0.1 percent to 10.0917 per dollar as of 11:34 a.m. in Johannesburg. That brings its decline this quarter to 2.1 percent, the worst of 16 major currencies tracked by Bloomberg, and stretching the run of losses to six quarters. Yields on South African government bonds due December 2026 dropped one basis point, or 0.01 percentage point, to 7.98 percent.

South African exports to the U.S. increased 14 percent to 52.5 billion rand ($5.2 billion) in the year to July, according to figures from the country’s revenue service. Growth in borrowing by households and companies in Africa’s biggest economy advanced to 8.2 percent in August from 7.4 percent in the previous month, the Pretoria-based Reserve Bank said on its website today. The median estimate in a Bloomberg survey of 13 economists was 7.2 percent.

To contact the reporter on this story: Vernon Wessels in Johannesburg at vwessels@bloomberg.net

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

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