The major currency of South Africa, Rand has gone down to the lowest level against USD in last 6 weeks. The investors are anxious that the current-account deficit of this African country will widen further as the Anglo American Platinum Ltd. has announced that it will idle shafts and cut the output. The Rand has come down to 8.7716 per USD after sliding down by 0.9%. Rand is currently at its weakest level since 6th December. The country is the worst performer of today among the 16 most traded currencies worldwide. The benchmark yields on the 10.5% bonds due by December, 2026, went ahead by 2 basis points and are at 7.13% now.
Anglo Platinum has announced that it will shut down 4 of its shafts and therefore output will be cut short by 400,000 ounces. Incidentally, metals and the other minerals made up 61% of the total exports of South Africa in the first 11 months of last year, as far as Government data is concerned. The trade deficit for the same time period was $13 billion. This is six times higher than what it was in the same time period of 2011. Such figures have definitely put pressure on the country’s current account and caused decline of Rand. Anglo Platinum, incidentally, is the biggest producer of Platinum in the world.
According to Nedbank Group’s Strategic Research Departmental Head, Mohammed Nalla, as the figures suggest that the current account deficit of South Africa will increase further, Rand will definitely face huge amount of pressure in the next few days. Nalla added that South Africa’s economy is largely dependent on the raw material output and the decision of Anglo Platinum will definitely have a huge impact on it.
Overall mining production in South Africa declined in November (For the 3rd straight month) by 4.5%, as far as the report from Statistics South Africa is concerned. In the first 11 months of 2012, the shipments of stones and precious metals went down by 15%. On the other hand, the base metal exports also plummeted by 3.2%. However, the total exports of the country increased by 1.4%.
Currently, the wave of strikes in the gold, diamond, coal, iron-ore and platinum mines across the country is hitting the country hard and the Government should take necessary steps urgently to come up with a solution.