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 Advances After Marcus Says Decline Against Dollar Overdone

March 8 (Bloomberg) -- The rand strengthened, reversing an earlier drop, after South African Reserve Bank Governor Gill Marcus said the currency’s decline to beyond 9 per dollar was overdone.

The rand gained as much as 0.7 percent to 9.0760 against the U.S. currency and was trading at 9.0990 by 4:35 p.m. in Johannesburg, paring its weekly decline to 0.4 percent. It earlier weakened as much as 0.3 percent after yesterday falling as low as 9.1884 per dollar, the worst intraday level since April 15, 2009. Yields on benchmark government 10.5 percent bonds due December 2026 rose 3 basis points, or 0.03 percentage point, to 7.37 percent.

The rand’s drop to a range of 9 per dollar to 9.20 per dollar “is overdone,” Marcus said in an interview with Bloomberg TV. “It will, over a period of time, retrace back to a more reasonable level.”

The currency of Africa’s largest economy weakened 6.9 percent this year, the worst performer of 25 emerging markets monitored by Bloomberg. Finance Minister Pravin Gordhan has delayed plans to narrow the budget deficit as sluggish economic growth curbed tax revenue. A slump in mining production, which accounts for 53 percent of the nation’s exports, is widening the current-account deficit, increasing the rand’s vulnerability as bond inflows slow.

Employment in the U.S. rose 236,000 last month, Labor Department data showed in Washington today. The median forecast of 90 economists surveyed by Bloomberg projected an advance of 165,000. The country’s jobless rate dropped to a five-year low of 7.7 percent from 7.9 percent.

The U.S. data lent further support to the rand, Vivienne Taberer, who helps manage about $11.5 billion in emerging-market debt and currencies at Investec Asset Management, said by phone from Cape Town.

The rand’s implied three-month volatility against the dollar rose to 13.1 percent, from 13 percent a week ago.

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.