BLBGRand Weakens, Set for Weekly Decline on Commodities, Greek Rescue Concern
The rand weakened for a second day, set for its first weekly decline in five, as commodities retreated and European leaders held back a rescue package for Greece.
South Africa’s currency retreated 0.8 percent to 7.6437 per dollar as of 8:20 a.m. in Johannesburg, bringing its decline this week to 1.6 percent. Against the euro, it slipped 0.6 percent to 10.1364.
Greece must pass its latest austerity package into law and identify 325 million euros ($431 million) in spending cuts before euro-area governments endorse a second bailout for the country, Luxembourg Prime Minister Jean-Claude Juncker said late yesterday.
“There will be talk of a general change in tone back towards risk-off and profit taking,” George Glynos, an economist at Johannesburg-based ETM Analytics, wrote in e-mailed comments today. “Given the on-going drama in Greece, this could very well keep the rand on the defensive for a little while longer.”
Standard & Poor’s GSCI Index of commodities fell for the first time in six days and a gauge of emerging-market stocks slipped the most this year on a closing basis. Commodities account for about 60 percent of South Africa’s exports, according to government data,
South Africa’s 13.5 percent bonds due 2015 gained for the first time in five days, driving the yield down two basis points, or 0.02 percentage point, to 6.60 percent.
To contact the reporter on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net
To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net
