The rand weakened further against the dollar in the late afternoon on Wednesday as the fallout from ratings agency Standard & Poor’s’ (S& P) revised growth announcement continued.
S& P revised the forecast for South African economic growth for 2016 downwards to 0.8% from the 1.6% growth expected in November 2015. It also revised its November forecast for 2017‚ down to 1.8% from 2.1% .
At 3.30am‚ the rand was trading at R15.2841 to the dollar from R15.0916 at Tuesday’s close. It was at R17.3940 against the euro from R17.1854 previously‚ and at R21.4670 against the pound from R21.3755 previously.
The euro was unchanged at $1.1384 after weakening earlier to $1.1327.
In 2015‚ economic growth slowed to 1.3%‚ which was below the estimated rate of population growth‚ implying a contraction in output per capita of 0.4%‚ S& P’s economists said.
This was not a downgrade‚ however‚ as only a rating committee could determine a rating action. This report did not constitute a rating action‚ S& P said.
An analyst at NKC African Economics said the rand had also fallen victim to the stronger dollar‚ and to sentiment after Parliament voted against the impeachment of President Jacob Zuma.
Further gains for the rand would be difficult given the heightened political risk‚ NKC said.
Tiso Black Star Group Digital/BDlive
Rand loses further ground on S&P growth revision
S& P revised the forecast for South African economic growth for 2016 downwards to 0.8% from the 1.6% growth expected in November 2015. It also revised its November forecast for 2017‚ down to 1.8% from 2.1% .
At 3.30am‚ the rand was trading at R15.2841 to the dollar from R15.0916 at Tuesday’s close. It was at R17.3940 against the euro from R17.1854 previously‚ and at R21.4670 against the pound from R21.3755 previously.
The euro was unchanged at $1.1384 after weakening earlier to $1.1327.
In 2015‚ economic growth slowed to 1.3%‚ which was below the estimated rate of population growth‚ implying a contraction in output per capita of 0.4%‚ S& P’s economists said.
This was not a downgrade‚ however‚ as only a rating committee could determine a rating action. This report did not constitute a rating action‚ S& P said.
An analyst at NKC African Economics said the rand had also fallen victim to the stronger dollar‚ and to sentiment after Parliament voted against the impeachment of President Jacob Zuma.
Further gains for the rand would be difficult given the heightened political risk‚ NKC said.
Tiso Black Star Group Digital/BDlive
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