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. Last Updated: 07/27/2016

South Africa Slumps




JOHANNESBURG, South Africa -- Fear that rand losses will cap interest rate cuts deepened the shadow over South Africa's economy and hurt financial markets in Johannesburg on Wednesday as the currency remained pinned at two-month lows above 6 to the dollar.


Stocks retreated and the bond market fell sharply as sellers circled, nagged by a 7 percent currency depreciation in under a week and fresh data highlighting the task faced by South Africa in delivering economic growth.


The Reserve Bank announced Tuesday that the third-quarter current account deficit had risen to 17.8 billion rand ($2.93 million), measured on an annualized and seasonally adjusted basis, compared with 5.7 billion rand the previous three months. It said the country experienced its first net capital outflow for two years and economists said this placed great pressure on South Africa to finance growth next year.