Poor GDP figures have little effect on the rand
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.