South Africa’s stock market traders are bracing themselves for further falls in share prices in the wake of finance minister Trevor Manuel’s resignation. Stocks fell sharply on Tuesday as analysts worried that inflation could rise, spooking foreign investors.
The rand has extended Tuesday’s 3% fall against the dollar on fears about South Africa’s economic policy. However, Mr Manuel has said he will work with the new leaders of the African National Congress (ANC).
Mr Manuel has overseen the country’s longest economic expansion on record, as well as its first budget surplus, since he took office in 1996. In the wake of his decision to quit the rand sank to 8.2176 against the dollar, from 7.9875 a day earlier. On Wednesday, it fell further to trade at 8.1713.
But experts said the latest fall could be put down to thin trade as the South African markets were closed for a public holiday.
Meanwhile, during Tuesday the Johannesburg Stock Exchange recorded its biggest drop since 1 August, slipping 3.8%, before recovering slightly after Mr Manuel indicated he was prepared to stay in the post if asked.
News of his decision came as official figures showed consumer price inflation surged to a new record high of 13.6% in August, way ahead of government targets of 3-6%.
Further data also showed that retail sales had dropped for their third month in a row, slipping 4.6% year-on-year in July.
SOURCED FROM BBC
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