The rand weakened almost 1.5% against the dollar in afternoon trade on Monday, following a report showing South Africa’s first quarter unemployment rate to be the highest on record.
The local currency opened stronger on Monday on news that ratings agency Moody’s would keep the country’s credit rating two levels above junk.
Moody’s said late on Friday that it would keep South Africa at its Baa2 credit rating, noting that the country was “approaching a turning point” after many years of economic decline.
The rand initially strengthened back below R15 to the dollar, trading at R14.76 against the US currency in the morning session. However, by 15h45, the unit had weakened 1.43% to R15.13 against the dollar.
Data showed that South Africa’s unemployment rate increased to 26.7% of the labour force in the first quarter of 2016, up 2.2 percentage points from 24.5% in the fourth quarter of 2015 – the highest level since the survey of households began in 2008.
The expanded unemployment rate which includes those who were available to work but did not look for work in the reference period also increased by 2.5 percentage points between Q4: 2015 and Q1: 2016 to 36.3%, StatsSA said.
The rand also weakened sharply against the British pound, at R21.79 (-1.70%), and the euro, at R17.23 (-1.62%).