Bloomberg News

Rand Worst Emerging Currency as Copper Declines on Stockpiles

April 03, 2012

The rand fell for the first time in three days as copper declined on rising stockpiles and as investors awaited the minutes of last month’s U.S. Federal Reserve policy meeting.

South Africa’s currency depreciated as much as 0.7 percent and traded 0.4 percent weaker at 7.6787 per dollar as of 4:47 p.m. in Johannesburg, the worst performer out of 25 emerging- market currencies tracked by Bloomberg. The yield on South Africa’s 13.5 percent bonds due 2015 rose four basis points to 6.724 percent.

Copper stockpiles monitored by the London Metal Exchange rose for a third session and are on course for the first monthly climb since September. The Federal Open Market Committee will release today minutes of its March 13 meeting when policy makers raised their assessment of the economy and repeated that “exceptionally low” interest rates may be needed through late 2014.

“The FOMC minutes will probably be the one that the market focuses on; that will really give us an insight into what the Fed is thinking,” Ion de Vleeschauwer, the Johannesburg-based chief dealer at Bidvest Bank Ltd., the nation’s biggest chain of money-changers, said by phone.

The rand may strengthen against the dollar if the FOMC minutes confirm the Fed is still concerned about growth in the U.S. and is not going to raise interest rates anytime soon, he said.

Copper for three-month delivery fell as much as 0.9 percent to $8,562 a metric ton. Commodities including metals account for 64 percent of South Africa’s exports, according to government data. The nation has the world’s biggest reserves of platinum, manganese and chrome.

Easter Weekend

Importer demand due to a shortened week also contributed to rand weakness, De Vleeschauwer said. South Africa’s markets are closed on April 6 and April 9 for the Easter holidays.

“Demand at the bottom end of the 7.60 to 7.70 range from local importers who want to hedge their exposures ahead of the Easter long weekend is driving the rand up,” he added.

Earlier, the National Association of Automobile Manufacturers of South Africa said vehicle sales increased at the slowest pace in more than two years in March as companies cut back on purchases.

Sales rose 4.8 percent in March from a year earlier to 56,110, the Pretoria-based industry organisation said in an e- mailed statement. Growth in sales eased from 6.4 percent in February.

Companies have pared back spending as the debt crisis in Europe curbed demand in a region that buys about a third of South African manufactured exports. Growth in Africa’s largest economy is set to slow to 2.7 percent this year from 3.1 percent in 2011, according to the government.

To contact the reporters on this story: Stephen Gunnion in Johannesburg at sgunnion@bloomberg.net Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net

To contact the editors responsible for this story: Gavin Serkin at


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