South African President Thabo Mbeki has said that the recent decline in the value of the country 's currency may help narrow the trade deficit and is not a cause for concern.

President Mbeki said in the latest online newsletter of ANC Today that South Africa would not be well served by a major weakening of the rand.

"Nothing has happened or is happening in our economy which should result in an automatic negative sentiment towards our country on the part of the domestic and global economic actors and 'movers and shakers'," Mbeki said.

Mbeki's comments came as rating agency Moody's said the rand looked set to extend a near five-year bull run against the U.S. dollar. But it would be restrained in the near term by volatility in commodity prices.

Emerging market jitters have sent the rand to a six-month low of 6.67 rand to the dollar. The Johannesburg Security Exchange's all-share index is down about 11 percent since the beginning of this month. The rand was trading at 6.5222 rand to the dollar on Monday.

Mbeki said that South Africa's economic fundamentals remained sound, although the current account deficit had continued to grow over the past few quarters.

He said it was more important to focus attention on what impact the market jitters would have on the economy in the medium term, as it is during this time that "the basic economic tendencies will become clear."

"It is important for all of us to understand that the recent falls in value affecting the rand and the JSE are pretty much in line with other comparable emerging markets.

"Some countries have done a little worse. South Africa has therefore not negatively been singled out among the emerging markets," he said.

Mbeki said that the underlying and decisive reason for the sensitivity of markets was that, globally, there was a considerable volume of savings chasing good investments.

Source: Xinhua