RAND SINKS, BOURSE FLAT

THE RAND weakened past 15 to the dollar for the first time since October, extending a decline sparked by the worst quarterly economic contraction in a decade and a ruling-party debate about the mandate of the central bank.

The currency weakened as much as 0.9 percent to R15.0081 against the greenback before paring the decline to trade at R14.9882 by 5pm.

South Africa’s economy contracted 3.2 percent on an annualised basis in the first quarter amid rolling electricity blackouts and a slump in manufacturing and mining production, data showed this week, the most since a recession in 2009. That sparked a debate about the role of the SA Reserve Bank, with some ANC leaders calling for quantitative easing to support growth.

Derivatives traders are boosting bets on interest-rate cuts that may fuel growth, but would weigh on the rand as the country’s widening current-account deficit increases its reliance on foreign purchases of stocks and bonds.

Forward-rate agreements are pricing in an 80 percent chance of a 25 basis point cut next month, and another by year-end.

Fresh jitters in emerging markets following Mexico’s credit downgrade added to investors’ concerns as the trade war continues to sap demand for riskier assets.

On the JSE, the blue chip Top40 index inched up 0.03 percent to 50 988.44 points, while the broader all share index gained 0.02 percent to end the session at 57 090.53 points.