Poor GDP fig­ures have lit­tle ef­fect on the rand

The Star Early Edition - - BUSINESS REPORT - Siseko Njobeni

THIS week’s Gross Do­mes­tic Prod­uct (GDP) had lit­tle im­pact on the rand, Old Mu­tual In­vest­ment Group chief econ­o­mist Rian Le Roux said yes­ter­day.

South Africa’s GDP for May de­creased 0.7 per­cent – with man­u­fac­tur­ing and trade sec­tors lead­ing the down­ward trend.

At 6.40am yes­ter­day the rand was R12.87 and at 5pm the cur­rency stood at R12.81.

The GDP fig­ures re­in­forced the view that the South African econ­omy was in a pre­car­i­ous po­si­tion.

On Sun­day the World Bank cut its fore­cast for the coun­try’s GDP growth for this year 0.5 per­cent­age points to 0.6 per­cent.

Le Roux said the rand’s re­ac­tion to the GDP fig­ures was not ex­tra­or­di­nary.

“There have been a lot of cross cur­rents at work with the rand, but for now it is trad­ing side­ways in a mod­er­ately volatile fash­ion.

“The move­ment has re­ally been neg­li­gi­ble; noth­ing more than very lim­ited daily volatil­ity.

“The US dol­lar was a bit stronger, so it might have had an im­pact ear­lier to­day, how­ever, for the most part it seems the GDP fig­ures had only a very lim­ited im­pact,” he said.

The JSE All Share in­dex yes­ter­day closed 0.18 per­cent lower, while the blue-chip top 40 shed 0.26 per­cent.

The bank­ing in­dex de­clined 0.74 per­cent.

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