The currency of the largest economy on the African continent dropped to its lowest value in one month against the U.S. dollar after news broke about the nation's inflation rate dropping last month more than anticipated, Bloomberg reports.
The inflation rate registered at 6.3 percent in January and it was 6.1 percent in February, Statistics South Africa indicated.
"Despite some recent warnings from the Governor concerning core inflation, we still expect the Monetary Policy Committee to maintain its accommodative stance until the downside risks to economic growth fade more compellingly in late 2012 and early 2013," states an email authored by chief economist Dennis Dykes with Nedbank Group in Johannesburg to Bloomberg.
China, the globe's biggest consumer of exports from South Africa, is likely to see manufacturing constrict in March, which would mark the fifth consecutive month of contraction, which pulled down the value of the rand early in the trading session on Thursday.
Government bonds issued by South Africa increased on Thursday after the report about inflation emerged, according to Reuters. The Reserve Bank of South Africa is less likely to increase interest rates this year.
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