Rand firms as econ­omy ex­pands 1.4%

The Star Early Edition - - MARKETS -

THE RAND firmed against the dol­lar yes­ter­day after the lat­est gross do­mes­tic prod­uct (GDP) data showed the strong­est quar­terly growth since late last year, while a lo­cal survey pointed to an im­prove­ment in business con­fi­dence.

At 5pm, the rand was bid at R10.9637 to the dol­lar, 2.74 cents stronger than at the same time on Mon­day.

Ex­pan­sion in Africa’s most ad­vanced, but strug­gling econ­omy quick­ened to 1.4 per­cent on an an­nu­alised quar­ter-on­quar­ter ba­sis in the third quar­ter, from 0.5 per­cent in the sec­ond quar­ter, Statis­tics SA said.

A fourth quar­ter survey by Rand Mer­chant Bank and the Bureau for Eco­nomic Re­search showed business con­fi­dence climbed into pos­i­tive ter­ri­tory for the first time since 2013.

“In­vestors re­sponded favourably to the bet­ter-than-ex­pected business con­fi­dence data,” Tra­di­tion An­a­lyt­ics said. The re­search firm noted that the pro­duc­tive side of the econ­omy re­mained plagued by struc­tural in­ef­fi­cien­cies, no­tably, elec­tric­ity short­ages dat­ing back to 2008.

The rand re­treated slightly after state power util­ity Eskom said its prof­its fell 24 per­cent and that it would need a sub­stan­tial cash in­jec­tion to keep the lights on.

The elec­tric­ity crunch has been iden­ti­fied as an ob­sta­cle to a growth tar­get of 5 per­cent.

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