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16 Jul 2013 14:10
The rand has lost 0.3% as concern increases around the impact on commodities. (Gallo)
The rand declined for the first time in three days on Tuesday as gold-mine workers rejected a proposal at the start of wage negotiations in the industry, fuelling concern that labour disruptions may weigh on exports and economic growth.
Trade unions representing gold-mining employees dismissed an offer to increase wages by 4%, increasing the prospects of a further deterioration in labour relations. Commodities account for more than 50% of South Africa’s exports, according to government data.
The country’s central bank will probably leave borrowing costs unchanged this week to support growth, according to a Bloomberg survey of economists.
“Local factors are again increasingly rand negative,” John Cairns, a currency strategist at Rand Merchant Bank said.
“The likelihood of major industrial action in the mining sector should be a concern.”
South Africa’s currency retreated 0.3% to 9.8970 per dollar as of 9:35am in Johannesburg.
Yields on benchmark 10.5% bonds due December 2026 dropped eight basis points, or 0.08 percentage point, to 7.87%.
Labour groups and the Chamber of Mines, which represents employers, will reconvene on July 24 to discuss the offer.
The central bank has left the rate unchanged since a surprise 50 basis-point cut a year ago. – Bloomberg
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