South African Rand Declines Against U.S. Dollar for Second Day

By Garth Theunissen

Aug. 20 (Bloomberg) -- South Africa's rand declined against the dollar for a second day.

The rand slipped as much as 0.6 percent to 7.7833 per dollar and was at 7.7526 by 9:23 a.m. in Johannesburg, from 7.7366 yesterday. It also weakened versus 11 of the 16 most-actively traded currencies monitored by Bloomberg.

South Africa's currency fell against the dollar and euro yesterday after the prices of gold and platinum slumped. South Africa produces almost 80 percent of the world's platinum and about 10 percent of its gold, typically causing the rand to move in tandem with the metals' prices.

Gold fell below $800 an ounce on concern a stronger U.S. dollar will continue to erode its appeal as an alternative investment. Platinum slumped to an 11-month low on speculation weaker global economic growth will trim demand for vehicles, which use the metal in their pollution-cutting devices known as autocatalysts.

The rand declined even after a government report yesterday showed economic growth rebounded in the second quarter from the slowest pace in six years. Africa's biggest economy expanded an annualized 4.9 percent, from 2.1 percent in the first three months of the year, Pretoria-based Statistics South Africa said.

Government bonds fell, with the yield on South Africa's benchmark 13.5 percent security due September 2015 rising 8 basis points to 9.16 percent. Yields move inversely to bond prices.

To contact the reporter on this story: Garth Theunissen in Johannesburg gtheunissen@bloomberg.net.