JOHANNESBURG: South Africa's rand weakened against the dollar early on Wednesday while bond yields rose on renewed economic concerns after the World Bank lowered its global growth forecast for 2015.
By 0615 GMT the rand was down 0.43 percent to 11.5665 per dollar, giving up gains it had eked out in the previous session to touch its weakest level this week following an overnight close of 11.5170.
The World Bank predicted the global economy would grow 3 percent this year, below a forecast of 3.4 percent made in June, with poor economic prospects in major and developing economies offsetting the benefit of lower oil prices.
The global price of crude slipped more than 1 percent on Wednesday to $46.10 a barrel. While this helps to push down local inflation, deteriorating fundamentals continue to cloud sentiment toward Africa's second largest economy.
"The rand in its own right remains fragile," market watchers from ETM Analytics said in a market note. Chronic electricity shortages will continue to weigh on output and confidence in the local market, the analysts added.
Bonds halted their recent rally, with the benchmark government issue due in 2026 at 7.59 percent.
South Africa releases November retail sales figures at 1100 GMT.
Comments
Comments are closed for this article.