The rand weakened against the dollar, extending this month’s worst drop among major currencies, on concern labor disputes at platinum mines will weigh on South Africa’s current-account deficit.
About 7,000 workers continued a strike that started on Nov. 3 at Northam Platinum Ltd. (NHM)’s biggest mine, the National Union of Mineworkers said. Pay talks continue at three other platinum mines that produce more than 70 percent of the world’s output. South Africa needs foreign investment to plug a current-account shortfall that may average 6.5 percent of economic output this year, according to government estimates.
“The rand remains a victim of poor local fundamentals as well as the mining labor unions,” Mohammed Nalla, head of strategic research at Nedbank Group Ltd. (NED), said in e-mailed comments. Labor disputes do “little to instill confidence in the already faltering economy,” he said.
The rand dropped 0.5 percent to 10.1873 per dollar as of 11:11 a.m. in Johannesburg, bringing its decline this month to 1.4 percent. Yields on bonds due December 2026 dropped one basis point, or 0.01 percentage point,to 8.09 percent.
South Africa’s currency will probably trade between 10.05 and 10.25 per dollar today, Nalla wrote. A sustained decline above 10.20 per dollar may trigger a slump to 10.50, he said.
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