The global financial crisis is beginning to weigh on South Africa's economic growth and is weakening the rand currency, the head of the chamber of commerce said on Wednesday.

"The depreciation of the rand against the three major trading currencies is cause for concern," said Neren Rau, head of the South African Chamber of Commerce and Industry.

"South Africa is experiencing a series of unpleasant developments in the financial environment that have a negative effect on business confidence," Rau told the chamber's annual convention.

The rand has lost 35 percent of its value against the dollar so far this year, with much of the loss occurring over the past two months.

Consumer inflation in Africa's largest economy is nearly double the rate of a year ago, standing at 13.7 percent in August.

Falling metals

Falling prices for precious metals are adding pressure on the local economy, he said.

The financial crisis has also made investors more wary of the risks posed by emerging markets, which could further complicate investment costs and influence investor decisions, Rau added.

During the first eight months of the year, foreign investors pulled out four billion rand from South African stocks and bonds, compared to 83.3 billion rand of purchases by foreigners in the same period last year, the chamber said.

Rau said the current account deficit at 8.0 percent of the gross domestic product was contributing to the rand's weakness.

AFP