BLBG:Rand Drops For Second Day As Commodities Fall On Growth
The rand declined for a second day as commodity prices fell amid concern Europe’s debt crisis is damping the global recovery while central bank policy makers hold back from further stimulus.
South Africa’s currency retreated 0.1 percent to 8.1739 as of 8:36 a.m. in Johannesburg. Yields on the nation’s 6.75 percent bonds due 2021 rose one basis point to 6.59 percent.
The Standard & Poor’s GSCI Index of raw materials dropped for the first time in three days as metals including copper and nickel declined. Commodities account for 45 percent of South Africa’s exports, according to government data for 2011. The European Central Bank left its benchmark interest rate unchanged last week, while the Federal Reserve refrained from introducing new stimulus measures to boost growth.
“The risk of rand weakness in the months ahead has increased and will increase further if central banks abroad do not reignite their quantitative easing-type policies,” Quinten Bertenshaw, a Johannesburg-based analyst at ETM Analytics, wrote in e-mailed comments.
Three-month copper dropped as much as 0.7 percent to $7,444.50 a metric ton on the London Metal Exchange. Copper has fallen 1.8 percent this year on concerns that Europe’s debt woes and slowing growth in China, the world’s top consumer of the metal, will crimp demand.
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
