Rand extends losses
The South African rand extended losses on Wednesday as investors worried that news of the first recession in eight years could prompt further credit rating downgrades.
The manufacturing and trade sectors saw sharp downturns, with growth contracting 0.7% in the first quarter of 2017 after shrinking 0.3% in the fourth quarter of 2016.
“The sharply negative GDP print will catalyse further credit ratings downgrades, probably sooner than we had previously anticipated,” said analyst at Nedbank Capital Reezwana Sumad.
Moody's expected to release ratings decision on Friday.
Net foreign reserves rose to US$42 billion in May, due in part to depreciation of the dollar versus most major currencies, the Reserve Bank said on Wednesday.
Government bonds were weaker, with the yield on benchmark paper due in 2026 up 4 basis points to 8.52%.
NAMPA/REUTERS
The manufacturing and trade sectors saw sharp downturns, with growth contracting 0.7% in the first quarter of 2017 after shrinking 0.3% in the fourth quarter of 2016.
“The sharply negative GDP print will catalyse further credit ratings downgrades, probably sooner than we had previously anticipated,” said analyst at Nedbank Capital Reezwana Sumad.
Moody's expected to release ratings decision on Friday.
Net foreign reserves rose to US$42 billion in May, due in part to depreciation of the dollar versus most major currencies, the Reserve Bank said on Wednesday.
Government bonds were weaker, with the yield on benchmark paper due in 2026 up 4 basis points to 8.52%.
NAMPA/REUTERS
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