S. African Rand Weakens 1st Time in Three Days as Strikes SpreadRobert Brand
The rand fell against the dollar for the first time in three days as strikes began at South Africa’s largest construction companies and its state-owned airline, extending labor disputes beyond gold mines and carmakers.
About 90,000 workers in the construction industry downed tools after wage talks deadlocked, while 600 technical staff at South African Airways began a strike. South Africa has been wracked by labor turmoil since last year, undermining growth in the continent’s biggest economy. Gross domestic product probably expanded 3.3 percent in the second quarter from 0.9 percent the quarter before, a report may show tomorrow, according to the median estimate of economists in a Bloomberg survey.
Labor unrest “can have devastating consequences for exports and diminish foreign investors’ appetite to invest in South Africa,” Bruce Donald, a currency strategist at Standard Bank Group Ltd. in Johannesburg, said in a note.
The rand retreated 0.2 percent to 10.2629 as of 11:49 a.m. in Johannesburg. Yields on benchmark 10.5 percent bonds due December 2026 were unchanged at 8.51 percent.
Employees at automotive plants owned by carmakers including Toyota Motor Corp, Bayerische Motoren Werke AG and Volkswagen AG will weigh an improved wage offer, which may end a walkout that started Aug. 19.
The National Union of Mineworkers, which represents 64 percent of employees at seven gold producers participating in centralized talks through the Chamber of Mines, and minority union UASA are holding out for a revised offer by the companies before deciding on whether to declare a strike, UASA’s head of mining, Franz Stehring, said today.