Li­lan­geni/Rand weaken against ma­jor cur­ren­cies

Swazi Observer - - BUSINESS - By Ma­jaha Nkonyane

AC­CORD­ING to a Re­cent Eco­nomic De­vel­op­ment (RED) re­port re­leased by the Cen­tral Bank of Swazi­land (CBS) for the month of Au­gust, the Li­lan­geni/Rand weak­ened against the ma­jor cur­ren­cies.

The lo­cal unit de­pre­ci­ated on the back of the news that the pres­i­dent of South Africa had sur­vived the vote of no con­fi­dence and the prospect of a fur­ther credit down­grade by Moody’s.

“Com­pared to July, the lo­cal unit weak­ened by 0.81 per cent to av­er­age E13.24 against the US dol­lar in Au­gust. Against the Pound Ster­ling, the lo­cal unit de­pre­ci­ated by 0.63 per cent to av­er­age E17.18 and against the Euro it fell by 3.43 per cent to av­er­age E15.64,” the re­port said.

The Rand, how­ever, ap­pre­ci­ated in the sec­ond half of the month fol­low­ing Moody’s de­ci­sion to main­tain South Africa’s credit rat­ing at in­vest­ment grade on Au­gust 12 and the di­min­ish­ing prospect of in­ter­est rate hikes by the Bank of Eng­land and the US Fed.

“How­ever, this was not enough to off­set the huge de­pre­ci­a­tion noted in the first half of the pe­riod un­der review. The lo­cal unit ended the pe­riod un­der review at E12.99 to the US dol­lar, E16.78 to the Pound Ster­ling and E15.47 to the Euro,” the re­port said.

Pre­lim­i­nary fig­ures for the month end­ing Au­gust 31 fur­ther in­di­cated that to­tal pub­lic debt stood at E11.7 bil­lion, an equiv­a­lent of 20.1 per cent of GDP.

This shows an in­crease of two per cent from E11.5 bil­lion recorded at the end of July 2017.

“As at the end of Au­gust 2017, ex­ter­nal debt stood at E5.3 bil­lion, an equiv­a­lent of 9.1 per cent of GDP. This fig­ure shows that ex­ter­nal debt has re­mained sta­ble over the month un­der review when com­pared to E5.3 bil­lion which was again recorded in July 2017,” the re­port said.

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