The South African Rand has strengthened against all of its most traded peers after the nation beat economists’ expectations regarding the nation’s monthly trade deficit figures. Inflation data also came in at a better-than-expected level.
Inflation in Africa’s biggest economy remained unchanged at 5.2%, less than the predicted 5.5%. The better-than-expected data could lead to the South African Central Bank leaving borrowing costs at its current 30-year low in a bid to stimulate growth.
“The producer inflation number has pared back some of the negativity about inflation,” Mohammed Nalla, head of strategic research at Nedbank Group Ltd. in Johannesburg, told Bloomberg. “Market participants are probably a bit less worried about inflation now. The narrower trade deficit has also helped, although that’s a very volatile number.”
The nation’s trade deficit for 2012 came in at 117.7 billion Rand, six-times larger than the figure posted in 2011. Labour unrest had a huge impact on South African exports and civil unrest continues to worry investors. The terrible figure put pressure onto the Rand causing the currency to weaken considerably. Todays better-than-expected figure should relive some of that pressure.
The Rand has also benefitted after the world’s second-largest consumer-goods maker, Unilever announced plans that it would spend up to 1 billion Rand to build a new plant and upgrade existing ones across South Africa.
Construction work is expected to begin at the end of June but it is unclear as to how many jobs will be created.
So far the Rand has strengthened by 1.1% against the US Dollar, and 1% against the Pound making it h best performing currency o the day.
Rates correct as of 15:00pm
The South African Rand to Pound exchange rate is currently trading at 0.07084
The South African Rand to Euro exchange rate is currently trading at 0.08253
The South African Rand to US Dollar exchange rate is currently trading at 0.11203
The South African Rand to Australian Dollar exchange rate is currently trading at 0.1075
The US Dollar to South African Rand exchange rate is currently trading at 8.92616
The Pound to South African Rand exchange rate is currently trading at 14.11609
The Euro to South African Rand exchange rate is currently trading at 12.11730
Comments are closed.