Rand Eases on Purchasing Managers’ Index First Drop in 3 MonthsJaco Visser
The rand weakened against the dollar as South Africa’s purchasing managers’ index fell for the first time in three months, showing factory output may have contracted in March.
The currency dropped 0.2 percent to 9.2063 per dollar by 11:46 p.m. in Johannesburg. The rand is the worst performer among 16 major currencies tracked by Bloomberg this year, losing 8 percent against the dollar. Yields on the benchmark 10.5 percent bonds due December 2026 dropped 3 basis points, or 0.03 percentage point, to 7.35 percent, the lowest level on a closing basis in more than three weeks.
Kagiso Tiso Holdings’ index declined to 49.3 from 53.6 in February, the Johannesburg-based company said in a statement today. Manufacturing, which contributes about 15 percent to South Africa’s gross domestic product, has been under pressure from rising electricity tariffs, transportation disruptions due to labor strikes and a slump in demand from the euro-area economy, which buys a third of the country’s exported manufactured goods.
Africa’s largest economy has a current-account deficit that forces reliance on foreign investment in stocks and bonds to fund the gap, the broadest measure in trade of goods and services. The deficit narrowed to 9.5 billion rand ($1.03 billion) in February from 24.5 billion rand a month earlier.