The South African rand fell on Tuesday after data showed that the country’s unemployment rate hit a new record high in the first quarter, signalling continued weakness in an economy whose woes were exacerbated by the COVID-19 pandemic.
Sentiment was also affected by the resumption of rotational power cuts by power utility Eskom, which struggles to power Africa’s most industrialised nation because of repeated faults at its ailing coal-fired power station fleet, constraining economic growth.
At 1455 GMT, the rand was 0.24% weaker at 13.7775 per dollar, pulling away from a 27-month best of 13.6775 touched last week.
South Africa’s unemployment rate rose to a new record high of 32.6% in the first quarter of 2021, with job losses recorded mostly in construction, followed by trade, private households, transport and agriculture sectors.
“All in all, these numbers are indicative of an economy still greatly impacted by the COVID-19 pandemic and resulting lockdowns of 2020, with many capable workers still inactive,” said Anchor Capital investment analyst Casey Delport.
Stocks on the Johannesburg Stock Exchange shrugged off weak unemployment numbers and followed global cues to regain all past losses and end just shy of its all-time high seen early last month.
The benchmark all-share index moved up 1.41% to end at 68,923 points, as a broad-based rally occurred across sectors on the back of a bright economic outlook in the United States. The blue-chip index of top 40 companies surged 1.48% to 62,699 points.
Analysts have said that moves on the local stock market are largely a function of what is happening in the United States and hence local factors do not seem to influence the price movements much.
The benchmark S&P 500 in the United States rose on Tuesday coming to within just 0.5% of its all-time peak on bullish economic prospects in the country.
In fixed income, the yield on the benchmark 2030 paper was down a single basis point to 8.9%.