ANGGOLD: 33,646 +675 (+2.05%)
South Africa's rand sinks to 1-week low amid row over central bank role
* Volatility jumps, EM-linked selloff worsened by policy
* Stocks steady as gold miners shine
(Updates prices, adds analyst quotes)
JOHANNESBURG, June 5 (Reuters) - South Africa's rand
continued to weaken against the dollar on Wednesday, sliding to
a fresh one-week low, weighed down by a squabble between the
ruling African National Congress (ANC) and government over the
mandate of the central bank.
At 1600 GMT the rand was 1.5% weaker at 14.8700
per dollar, bringing losses since Monday to more than 3% as a
double whammy of dismal growth and policy uncertainty
On Tuesday Statistics South Africa announced the economy
shrank by 3.2% in the first quarter as power cuts over the
period battered mining and manufacturing, news that was followed
by a decision by the ANC to explore quantitative easing, sending
the currency into a tailspin.
On Wednesday Finance Minister Tito Mboweni told reporters in
Johannesburg there were no plans to change the bank's mandate.
At the same event central bank governor Lesetja Kganyago
insisted the main job of the bank was to protect the rand's
value in the interests of growth.
But the ANC refused to back down from a call it made on
Tuesday to mandate the central bank to boost employment,
underlining deep fissures in the party that are seen as leading
obstacles to President Cyril Ramaphosa's reform drive.
"The announcement, and counter announcements on the SARBís
independence, come at a poor time for the rand, which typically
sees material risk from the second quarter to the end of the
third quarter," said Investec's chief economist Annabel Bishop
One-month implied volatility hit its highest
level since April 10, before easing slightly.
The yield on the benchmark 10-year government bond
reached 8.5% having started the previous session at 8.415%.
On the bourse, stocks gained for a second session as the
All-share index rose 1.01% to 57,073 points, while the
blue chips Top-40 index rose 1.04% to 50,976 points.
Global gold prices rose to 15-week highs, lifting mining
company Gold Fields to the top of the blue chips with
a 6.35% advance to 76 rand, while fellow bullion miner AngloGold
rose 4.22% to 217.20 rand.
"The fear of these trade wars; investors are fleeing to gold
which is usually a safe haven, contributing to higher gold
stocks," said AG Capital trader Jaun Wessels.
Heavyweight luxury brand Richemont gained 3.47% to
117.07 rand on the back of the weaker rand, stronger U.S.
markets, and a possible interest rate cut by the Federal
Reserve, Wessels said.
(Reporting by Onke Ngcuka and Mfuneko Toyana, Editing by
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