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South Africa's rand tumbles as ANC squabbles over central bank

(Adds latest data, stocks)

JOHANNESBURG, June 6 (Reuters) - South Africa's rand weakened to its lowest in eight months on Thursday as the ruling African National Congress' assertion that the independence of the central bank had not changed did little to reassure rattled investors.

A dispute over the central bank's mandate has exposed deep divisions in the ANC, with one group loyal to President Cyril Ramaphosa opposing calls from a rival faction for the bank to do more to boost employment and kick-start growth in the country's sclerotic economy.

The ANC said on Thursday that the spat, which exacerbated damage done by data showing the economy shrank by 3.2% in the first quarter, had undermined citizens' and investors' confidence.

At 1540 GMT, the rand was 0.7% weaker at 14.9625 per dollar, having earlier fallen to its lowest since October at 15.0100. "The rand remains on the back foot as the impasse over the (central bank) mandate continues," RMB Mpho Tsebe wrote in a note.

Bonds also weakened, with the yield on the benchmark 10-year issue up 2 basis points to 8.47%.

Stocks were little changed with the broader All-Share index edging up 0.03% to 57,091 points, while the blue chip Top-40 index was 0.02% higher at 50,988 points.

Gold and platinum stocks were responsible for much of the gains as bullion prices rose, continuing last week's strong run as persistent fears about the impact of trade wars on the economy and rising expectations for a U.S. interest rate cut boosted the metal's appeal.

Topping gainers on the broader index was Royal Bafokeng Platinum, which rose 6.34% to 31.05 rand, while Harmony Gold climbed 3.12% to 28.42 rand.

Cigarette maker British American Tobacco led the blue chip index, rising 3.51% to 554.62 rand.

"British American Tobacco has had a tough time...because of all the possible American legislation around smoking. A weaker rand clearly helps British American Tobacco," said Wayne McCurrie, a portfolio manager at FNB Wealth and Investments. (Reporting by Olivia Kumwenda-Mtambo and Onke Ngcuka; Editing by Kirsten Donovan)

2019-06-06 18:46:06

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