It does not come as a surprise in light of the inept leadership in South Africa that the Rand struggled at five-year lows against the dollar today as the second day of a strike across the country’s platinum mining belt continued to unnerve investors. The Rand, which breached the 11.00 level on Thursday for the first time since October 2008, was at R11.1075 for the US$, 1% weaker than yesterday’s New York close.
Union leaders representing as many as 100 000 platinum miners who walked off the job yesterday sat down with management from the world’s top three producers – Anglo American Platinum, Impala Platinum and Lonmin – in a bid to end the stoppage. The government-brokered talks will resume next week.
h3. Other Currency Impacts
An emerging markets selloff that hit currencies such as the Turkish lira, the Indian rupee and the Brazilian real today also impacted the Rand. Expectations of reduced monetary stimulus by major central banks have driven investors to safe haven assets in the developed world. “South African markets have been hit by…continued strength from the dollar and the new phase of capital outflows out of emerging markets, and locally based problems – worries about strike action,” said Paul Chakaduka of Global Trader.
“A lot of investors are still worried about whether or not South Africa is a good place to invest.” … Unfortunately South Africa has only two options: watch and learn, or force the government out of office and prosper!