Thursday, October 23, 2008

Rand amongst the worst hit by the global sell-off

Inflationary pressure increases even further as price of imports rockets (due to Rand's weakness).
clipped from

JOHANNESBURG (Reuters) - South Africa's rand fell to a new 6-1/2 year low against the dollar on Wednesday as investors dumped high-risk assets on global recession worries and local stocks also plunged on falling commodity prices.

The rand is among the worst hit by the global sell-off, largely because of South Africa's large current account deficit, which at 7.3 percent of GDP in the second quarter makes the economy highly dependent on foreign financing.

"(The rand's weakness) is extremely inflationary, and that is why bonds are also being hammered," de Vleeschauwer said.

The world's No. 4 gold producer Gold Fields took the biggest knock, shedding 8.54 percent to 64.03 rand.

South Africa's biggest retail bank Absa lost 8.04 percent to 82.99 rand and financial holding company RMB Holdings fell 7.77 percent to 19 rand.

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