Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Rand Weakens to Four-Year Low as Labor Protests Spur Concern

March 7 (Bloomberg) -- The rand reached its weakest level in almost four years as labor protests at mines spurred concern of a repeat of violence that curbed production last year.

The currency of Africa’s biggest economy lost as much as 0.7 percent to 9.1884 per dollar, the lowest intraday level since April 2009, and traded 0.1 percent lower at 9.1362 by 4:22 p.m. in Johannesburg. Yields on benchmark government 10.5 percent bonds due December 2026 rose three basis points, or 0.03 percentage point, to 7.338 percent.

Workers downed tools at Exxaro Resources Ltd.’s Matla and Arnot mines, the company said in a statement today. South Africa has been rocked by labor unrest following a wage dispute at Lonmin Plc’s Marikana operations in August, which led to 34 people being shot dead by police.

“There is continued pressure on the rand from labor disruptions,” Ion de Vleeschauwer, the Johannesburg-based chief dealer at Bidvest Bank Ltd., said by phone. “Exxaro also has issues now.”

Mining accounts for two-thirds of exports in South Africa, the continent’s largest gold producer, makes up about 9 percent of gross domestic product and directly employs about 500,000 of the nation’s 51.8 million people.

The rand is the third-worst performing currency this year, behind the Japanese yen and British pound, among 16 major currencies tracked by Bloomberg.

An appreciation of the rand in the short term is “unlikely,” de Vleeschauwer said. The currency isn’t cheap at these levels, he said.

“9.25 rand is a cheap rand and 8.75 rand is the new expensive rand,” Malcolm Charles, who helps manage about $3.3 billion in fixed-income securities at Investec Asset Management, said at a presentation in Johannesburg today.

The rand’s three-month implied volatility against the dollar rose to 13.04 percent, from 12.83 yesterday.

To contact the reporter on this story: Jaco Visser in Johannesburg at avisser3@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.