South Africa’s rand has become “a lot more competitive” and presents an opportunity for manufacturers to boost exports, Trade and Industry Minister Rob Davies said.
“This is a better moment for manufacturers than they’ve had for a while in terms of the currency,” Davies told reporters in Cape Town today. “The impact of the overvalued rand was a depressing factor on exports in a wide range of external markets and a fairly broad range of products.”
The rand reversed its gains against the dollar after the comments, dropping 0.3 percent to 9.1578 at 12:49 p.m. in Johannesburg. While the currency is unlikely to strengthen to levels of about 7 per dollar “in the near future,” its high degree of volatility remains a concern for exporters, Davies said.
South Africa’s economy, the continent’s largest, grew an annualized 2.1 percent in the fourth quarter as manufacturing and agricultural output expanded, the statistics agency said on Feb. 26.
The rand is close to a four-year low after falling 7.5 percent against the dollar this year, making it the third weakest of 16 major currencies tracked by Bloomberg. Only the Japanese yen and the British pound have fared worse.
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