Rand firms as economy expands 1.4%
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.