South African business confidence dropped last month to the lowest level since at least 2003 as faster inflation and a weaker rand boosted costs.
The business confidence index fell to 90.4 from 93 in February, the Johannesburg-based South African Chamber of Commerce and Industry said in an e-mailed statement today. The index is compiled from 13 economic indicators, including retail sales, inflation and financial gauges, such as a stock-market index and currency.
“The expected upturn in business confidence for 2013 has yet to materialize,” according to the statement. “The continued weakening of the rand is of special concern while inflationary expectations could be on the rise.”
Inflation near the top of the bank’s target of 3 percent to 6 percent is limiting the room the Reserve Bank has to stimulate the continent’s largest economy. The bank held its benchmark interest rate at 5 percent last month as inflation accelerated to 5.9 percent in February. The rand has declined 8.4 percent this year against the dollar, the worst performer among the 16 major currencies tracked by Bloomberg.
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