Share

Rand falls as weak GDP data catches market off guard

Cape Town - The rand lost 0.8% to the dollar in the early afternoon on Tuesday, after Stats SA reported that the SA's quarter-on-quarter GDP had fallen by 2.2%

The local currency was trading at R12.67 to the greenback at 12:36, having lost 12c to the dollar after the announcement of the weak GDP figures was made at about 11:30 in Pretoria. 

The rand had been even in early trade. It opened the day at R12.55/$.  

Stats SA reported that SA’s seasonally adjusted GDP had contracted by 2.2% during the first quarter of 2018, when compared to the fourth quarter of 2017. 

This is the largest quarter-on-quarter decline since 2009. 

While economists had broadly been expected a decrease in GDP growth, the scale of the decrease was above expectations. 

"While the expectation [was] that the GDP number would disappoint (-0.5% quarter-on-quarter) the fact that the GDP number came in so much lower at -2.2% quarter-on-quarter ... caught the market off guard," said Andre Botha, a senior currency dealer at TreasuryONE. 

"This caused the knee-jerk reaction," he said, adding that despite improved sentiment since President Cyril Ramaphosa took office, there was "still a lot of work to be done in order to jump start the economy". 

Bianca Botes, corporate treasury manager at Peregrine Treasury Solution, said : "Muted purchasing manager’s index (PMI) figures, coupled with the contraction in GDP speaks to the difficulties faced by South Africa as an emerging market to create and sustain economic welfare across the board."

"Although we have seen a turnaround in market sentiment since the ousting of Zuma, this sentiment has failed to translate into economic growth thus far."

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.88
+0.3%
Rand - Pound
23.86
+0.2%
Rand - Euro
20.37
+0.3%
Rand - Aus dollar
12.32
+0.1%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders