rand

South Africa’s rand rallied to its strongest in almost two weeks after Finance Minister Pravin Gordhan announced a smaller-than-expected budget deficit and ignored union demands to scrap inflation targeting.

According to Bloomberg news, the currency of Africa’s biggest economy appreciated as much as 1.4 percent to 7.5678 per dollar, its best intraday level since Feb. 4. It traded 1.1 percent stronger at 7.5865 by 5:33 p.m. in Johannesburg, from a close of 7.6712 on the 16th of February.

South Africa risks losing much of its manufacturing base and tens of thousands of jobs as the global recession and a resurgent rand undermine companies already suffering skills shortages and high labor costs according to Bloomberg news.

A government report due by the 10th of September will show that manufacturing has decreased by 16.4% from about year ago. South Africa’s trade minister officially stated on June 30th that the country is in danger of deindustrialization.