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Lesotho textile sector frayed by currency volatility
23 May '12
1 min read
Despite being a small African landlocked country, Lesotho has been able to build a good textile industry in the country, thanks to the duty-free access to US markets under the African Growth and Opportunity Act (AGOA).
Currently, the textile sector is the number-one employer in Lesotho which has a population of just two million.
However, the Lesotho textile sector has been deeply affected by the European debt-crisis, as its currency – Loti is facing highly volatility, since it is pegged with the South African Rand, which too has undergone high instability in recent months.
Lesotho exports 80 percent of its textile produce to the US and since the rand has fallen as much as 7-8 percent against the US dollar this year, it is becoming very difficult for the textile industry to manage.
The Rand had lost 15 percent against the US dollar in 2011, but regained more than half of that in 2012, but again slipped by 7-8 percent in the last few days.
Currently, the textile sector is the number-one employer in Lesotho which has a population of just two million.
However, the Lesotho textile sector has been deeply affected by the European debt-crisis, as its currency – Loti is facing highly volatility, since it is pegged with the South African Rand, which too has undergone high instability in recent months.
Lesotho exports 80 percent of its textile produce to the US and since the rand has fallen as much as 7-8 percent against the US dollar this year, it is becoming very difficult for the textile industry to manage.
The Rand had lost 15 percent against the US dollar in 2011, but regained more than half of that in 2012, but again slipped by 7-8 percent in the last few days.
Fibre2fashion News Desk - India
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