RPT-UPDATE 1-Marcus says SAfrica in fragile recovery, rand hurts

(Repeats Oct 13 story with no changes to text)

* Retail, manufacturing data not good

* Rand hurting economy

* S.Africa needs foreign inflows

(Adds details, background)

JOHANNESBURG, Oct 13 (BestGrowthStock) – South African central bank
Governor Gill Marcus said on Wednesday the continent’s largest
economy was in a fragile recovery and the strong rand was
hurting the country.

The rand (ZAR=D3: ) has firmed by over 28 percent since the
beginning of last year, weighing on exports from the mining and
manufacturing sectors that are key contributors to the economy.

“We’ve seen the (manufacturing and retail) numbers that have
come out. They are not as good as they should be. We are in a
fragile recovery,” she told a meeting in Johannesburg.

Data this week showed growth in manufacturing sector output
and retail sales slowed unexpectedly on a year-on-year basis in
August, raising the possibility of another interest rate cut.
[ID:nLDE69C123] [ID:nLDE69B18X]

The central bank has reduced the repo rate by 600 basis
points to 6.0 percent since December 2008, taking lending rates
to their lowest level in three decades.

Marcus said the rand had helped ease inflation and
contributed to the bank’s decision to lower interest rates by
100 basis points this year, but it could be difficult to
influence its value on the market to help the manufacturing
sector.

“The size of the South African market is huge. When you are
looking at what you can do , you have got to recognise the size
of the market,” Marcus said.

More than $4 billion on average is traded on the rand on a
daily basis and the bulk of that is abroad, according to Reuters
data.

She re-iterated that there was no “quick fix” to dealing
with the flood of capital inflows into emerging markets, which
have led to currency appreciations.

She said South Africa needed capital inflows to fund its
current account deficit.

“We depend on foreign inflows. Our domestic savings… are
nowhere near enough to be able to finance ourselves. That is a
huge difference between us and other emerging markets.”

South Africa, unlike other emerging markets, has shied away
from introducing a tax on capital inflows to help limit the
currency’s gains. The idea did not get enough support at the
ruling African National Congress’ policy meeting in September.

Marcus said the country should look at other policies to
support the economy and boost job creation.

South Africa has lost more than a million jobs since the
beginning of last year, raising unemployment to 25.3 percent of
the working force.
(Reporting by Phumza Macanda, Editing by Chizu Nomiyama)

RPT-UPDATE 1-Marcus says SAfrica in fragile recovery, rand hurts