(Adds background, analyst quote)
JOHANNESBURG Oct 5 (Reuters) – South Africa’s rand extended
its losses against the dollar to nearly 4 percent on Friday,
plumbing a 3-1/2 year low as investors dumped local assets on
worries about the impact of a wave of illegal strikes sweeping
Africa’s biggest economy.
The rand fell as low as 8.85 to the dollar, its
weakest level since April 2009, according to Reuters data.
It was by far the worst performer on the day in a basket of
20 emerging market currencies monitored by Reuters.
The trigger for the fall was the firing on Friday of 12,000
wildcat strikers by Anglo American Platinum (Amplats),
a high-stakes attempt by the world’s biggest platinum producer
to push back at a wave of illegal stoppages in South Africa’s
mining and other sectors.
The rand fell sharply after the announcement,
suggesting investors fear the sackings could worsen what is
shaping up to be the most damaging period of labour unrest in
the country since the end of apartheid in 1994.
The slide gained pace after markets closed in Johannesburg,
a clear indication that the moves were driven by nervous foreign
investors.
Reflecting concerns about the spreading unrest which has
killed almost 50 people, Moody’s cut South Africa’s credit
rating last week.
Finance Minister Pravin Gordhan has already said he will
have to cut his 2.7 percent growth forecast for 2012 when he
delivers an interim budget on Oct. 24.
“The government is doing nothing. We have tried this week to
understand what the government’s reaction and policy is to stop
contagion between mines and between industries and sectors of
the economy. There has been no response beyond ‘talks’,” said
Nomura analyst Peter Attard Montalto.
(Reporting by Stella Mapenzauswa and Ed Stoddard; Editing by
Hugh Lawson)
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