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Weaker rand fails to rally exports

Oct 25 2012 14:53 Sapa

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Cape Town - The rand weakened by 7% in the first half of 2012 but this failed to stimulate manufacturing exports, Finance Minister Pravin Gordhan said in his medium-term budget policy statement on Thursday.

"In real terms, the rand was 7% weaker in the first half of 2012, compared to the same period in 2011," he said.

"The weaker rand has so far provided little support for manufacturing export growth, which remains weak in the present economic environment."

Gordhan said the wildcat strikes in the mining sector and a current account deficit forecast to average 5.9% of gross domestic product this year had turned sentiment against the local currency.

The rand's exchange value fell from an average of R8.01 to the dollar in January to R8.62 against the greenback in October, after two months of turmoil at mines.

Treasury and the SA Reserve Bank have long resisted calls by the labour movement for government to intervene to lower the rand to boost exports.

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