Rand weakens after trade and budget data

The South African rand weakened against a broadly stronger US dollar on Thursday after local data showed a rise in producer inflation, a widening budget deficit and a trade deficit.

At 1510 GMT, the rand traded at R18.88 against the dollar.

The dollar last traded around 0.6% stronger against a basket of global currencies, boosted by month-end demand as investors squared positions for November.

South Africa’s producer inflation quickened to 5.8% year on year in October from 5.1% in September, statistics agency data showed, in line with expectations.

The country’s budget balance data for October showed a deficit of R41.23 billion, compared to a deficit of R40.57 billion in the same month a year earlier.

The South African Revenue Services also published trade balance figures for October, showing a deficit of R12.66 billion.

Investors had expected lacklustre figures, said analysts at ETM Analytics.

“On a trade-weighted basis, the ZAR has had a bad week, reflecting the onset of more intense load-shedding and the plethora of negative news headlines, mostly related to dysfunctional SOEs (state-owned enterprises),” ETM said in a research note.

South Africa’s benchmark 2030 government bond was weaker, with the yield up 6.5 basis points at 9.980%.

On the Johannesburg Stock Exchange, the Top-40 index ended the day about 0.5% higher.