The timing could hardly have been worse. Just as portfolio flows to emerging markets again hit the skids, SA’s current account deficit hit a shock 4.8% of GDP. Markets had expected the deficit on the current account of the balance of payments to widen from the fourth quarter’s 2.9% after first-quarter exports plunged and SA recorded its first trade deficit since the first quarter of 2016. But they had not expected the current account deficit to widen quite this much. Fortunately, Thursday’s current account bad news was tempered by Wednesday’s inflation good news so the rand didn’t take a hit. But it is still far too close to R14 to the dollar for comfort. And the current account deficit will not help matters, showing as it does exactly why SA is so vulnerable to those portfolio outflows. Global investors had already started to turn against emerging markets in recent weeks as a strong dollar, rising US interest rates and higher oil prices eroded their appetite for risk and their desi...

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