Rand slips 3% as SA edges towards recession
A sharp fall in the Turkish lira and bad news domestically is weighing on the local currency, with the rand slipping towards R15 to the dollar
The rand fell as much as 3% against the US dollar on Wednesday, buffeted by a spate of bad domestic news, as global investors shy away from emerging-market currencies. Earlier, ratings agency Moody said it did not expect the South African government’s fiscal consolidation to proceed as quickly as previously expected. "Growth this year is expected to be lower than the government’s own estimates, weighing on tax revenues, while the public-sector wage agreement in June also brings extra, unbudgeted costs," said Moody’s senior credit officer Lucie Villa. Local retail sales data was also downbeat, growing 0.7% year on year in June, well below market expectations of a rise of 2%. This, along with recent data, raises the serious risk that SA suffered a technical recession in the second quarter, although economic activity was still expected to pick up in the second half of the year, Capital Economics senior emerging-markets economist John Ashbourne said. Global focus remains on Turkey, as t...
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