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Rand Drops, Reflecting Slump

Nota de 200 rands, a moeda da África do Sul
Nota de 200 rands, a moeda da África do Sul

The South African rand fell against the dollar on Friday, after the release of a whole-economy survey that showed business activity shrinking in Africa's most industrialized economy.

S&P Global's South Africa Purchasing Managers Index (PMI) fell to 48.7 in January from 50.2 in December. Readings below 50 indicate a contraction in activity.

It was the fastest pace of contraction since the end of 2021 as new orders fell due to rolling power cuts and weak economic conditions, the survey showed.

Concurrently, the government's benchmark 2030 bond was weaker, with the yield up 8.5 basis points to 9.585%.

Along with the rand falling in response to new economic data, it also fell Friday as the U.S. dollar strengthened in global markets after the release of strong U.S. employment data.