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Johannesburg - The rand traded close to a seven-month low against the dollar on Thursday, within a whisker of the psychologically key 11.0 level, after dismal manufacturing and mining production numbers pointed to an economy in trouble.
The rand was at R10.9600/$ at 15:08 GMT, a shade stronger than its weakest intraday level of R10.9965/%. On Wednesday, the currency breached 11 against the dollar for the first time since February, hit by a broad emerging market sell-off.
On Thursday, the trigger was data showing factory output dropping to a five-year low and mining production in Africa's most advanced economy languishing at its worst level since 2012.
Manufacturing output fell nearly 8% due to the impact of a strike by the Numsa, while mining contracted by 7.7%, failing to bounce back quickly from a five-month strike by platinum miners.
The numbers will add to the argument that the South African Reserve Bank (Sarb) will opt to keep rates at 5.75% at its September meeting, providing little fresh impetus for foreigners to pile into South African fixed income.
A poll of economists taken by Reuters before the data pointed to rates staying on hold.
"The next Sarb decision will take place one week from now and though rand fragility remains an on-going concern, this weak performance is likely to tilt the scales towards an unchanged decision," Tradition Analytics said in a note.
Debt markets managed to shake off the weaker rand, with the yield on the benchmark bond due in 2026 remaining flat at 8.215%.
