Rand falls as GDP contracts more than estimates

The rand declined along with government bonds after data showed South Africa’s economy contracted more than economists’ forecasts in the first quarter.

Read: Economy nosedives in Q1, hurting rand

The currency slumped as much as 1.4% and traded 0.6% weaker at 14.53 per dollar by 11:33 am in Johannesburg. Yields on benchmark 2026 bonds climbed two basis points, reversing a drop of as much as four points.

An index of South African banks extended declines, falling 3.2%. The benchmark stock index was down 0.2%, supported by shares of companies that benefit form declines in the rand.

Gross domestic product contracted 3.2% on an annualised, quarter-to-quarter basis in the three months through March, more than the 1.6% estimate of economists in a Bloomberg survey. The economy expanded 1.4% in the previous quarter.