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South African Business Confidence Gains on Lower Rates

Jan. 9 (Bloomberg) -- South African business confidence rose to a four-month high in December as low interest rates helped boost manufacturing and construction in Africa’s largest economy.

The business confidence index climbed to 93 last month, from 91.7 in November, the Johannesburg-based South African Chamber of Commerce and Industry said in an e-mailed statement today. The index is compiled from 13 economic indicators, including retail sales, inflation and financial gauges, such as the stock-market index and currency.

“The relative price stability and the easing of the monetary policy stance in South Africa have assisted the economy and averted a more serious economic slowdown,” the chamber said. “The promise of improvements in confidence will only realize if the threats of continued labor protest activity, already revealed in the early days of 2013, are dealt with decisively.”

The central bank on Nov. 22 left its benchmark interest rate unchanged at 5 percent, the lowest level in more than 30 years, after a surprise cut in July aimed at bolstering the economy. Inflation has stayed within the central bank’s 3 percent to 6 percent target band since May.

Harmony Gold Mining Co., Africa’s third-largest producer of the metal, on Jan. 7 said it may fire workers and close its biggest mine following an illegal strike at the company. Harmony was one of several mining companies affected by pay strikes that began in August.

To contact the reporter on this story: Franz Wild in Johannesburg at fwild@bloomberg.net

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

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