Rand Hits 6-Week Low as Amplats Job-Cut Plan Fuels Labor Concern
The rand retreated to its lowest against the dollar in more than six weeks on concern plans made by South Africa’s largest platinum producer to idle shafts and cut jobs could trigger further labor unrest in the country.
The rand depreciated as much as 0.6 percent and traded 0.4 percent lower at 8.8547 per dollar as of 8:43 a.m. in Johannesburg, the weakest level since Dec. 4 and the worst performer of 16 major currencies tracked by Bloomberg. Yields on benchmark 10.5 percent bonds due December 2026 were unchanged at 7.13 percent.
Anglo American Platinum Ltd. (AMS) will shut four shafts, cutting output by 400,000 ounces and putting 14,000 jobs at risk, it said yesterday. Metals and other minerals accounted for 61 percent of South Africa’s exports in the first 11 months of 2012, according to government data. The trade deficit in the same period was 112.7 billion rand ($13 billion), more than six times bigger than a year earlier, as a wave of strikes in the mining and transport industries intensified.
“The risk is that this now escalates into another round of major labor unrest,” Quinten Bertenshaw, a Johannesburg-based analyst at ETM Analytics, and colleagues wrote in e-mailed comments. “The impact of the unrest was clearly evident in the trade data in 2012 and this latest news is also likely to affect the trade account which remains under considerable pressure.”
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