South Africa's rand falls to week lows on wide trade deficit - CNBC Africa

South Africa's rand falls to week lows on wide trade deficit

Financial

by Reuters 0

South Africa's rand falls to week lows on wide trade deficit. PHOTO: Getty Images

This follows after the rand lost ground against the trade deficit which widened sharply in October.

The latest blow to Africa's most advanced, but struggling, economy was softened by the energy department announcing that fuel prices would drop from next week because of falling global oil prices.

The trade deficit widened to a record 21.33 billion rand (1.9 billion US dollars) in October, from 3.04 billion rand in September, as exports fell nearly 2 per cent while imports soared by 18 per cent, the revenue service said.

(READ MORE: Why the S.African rand is undervalued)

The rand hit a session low of 11.0675 against the dollar on the news, its weakest since Nov. 20, according to Thomson Reuters data.

By 1541 GMT the local unit was 0.51 per cent softer at 11.0400 compared with Thursday's close.

Government bonds extended the previous day's gains, with the yield for the 2026 benchmark shedding 6.5 basis points to end at 7.61 per cent, near the 1-1/2 year low of 7.605 per cent touched earlier in the session.

Reserve Bank Deputy Governor Daniel Mminele reiterated on Friday that rand weakness posed upside risks to the inflation outlook, reinforcing expectations that the bank would raise interest rates further next year after 75 basis points of hikes in 2014.

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