JOHANNESBURGÂ (Reuters) –Â South Africa’s rand traded sideways against the dollar on Monday, shrugging off a rejection by 220,000 striking metal workers of the latest wage offer from employers to try to end a two-week work stoppage.
After two sessions of losses in the previous week, the rand inched up 0.02 percent to 10.7000 versus the greenback by 1438 GMT.
The rand is expected to trade in the 10.65-10.85 range leading up to an interest rate decision by the central bank on Thursday.
Governor Gill Marcus is expected to keep interest rates unchanged as the bank battles to meet its inflation target of between 3 and 6 percent.
On Sunday, strike leader NUMSA rejected employers’ in the metals and engineering sectors latest offer of a 3-year wage deal, instead calling on its members to intensify industrial action.
In addition to a wage hike and work-related benefits, the union has grievances about the role of labour brokers in the industry.
Giant automobile makers Ford and GM have suspended production, while construction at two plants of state-owned power-utility Eskom has also been disrupted.
Consistent labour unrest in South Africa, including an unprecedented 5-month stoppage in the platinum sector, led the economy into a first quarter contraction and hit investor sentiment, undermining the rand.
“Any kind of resolution will be a temporary relief. It will be a short driver either way, but as long as the strikes persist we will see the rand trading weaker,” one Johannesburg-based currency trader said.
Yields on both benchmark government bonds edged lower, the paper due in 2015 shedding 3.5 basis points to 6.67 percent and the 2026 paper shedding 3 basis points to 8.325 percent.
