Rand trends as currency is ‘shown no mercy’

At 8.20am‚ the rand was at R13.2907 against the dollar.

At 9.20am‚ “The Rand” was trending in Johannesburg on Twitter.

“The rand is being shown no mercy‚” tweeted @ItsMeVuyoGee.

‏"The Rand is leading emerging markets in currency decline‚" posted @sluttybacon_.

‏@jamesstyan quote-tweeted @BDliveSA’s “BREAKING NEWS | Rand briefly touches new all-time low of R14 against the dollar. More to follow shortly”‚ adding: “The Rand is crashing. Absolutely plummeting. Can you say economic crisis?”

BDlive had earlier quoted Rand Merchant Bank analysts as saying the weakness in the currency was due to fear about the Chinese economy. The analysts said all risk assets were being "smacked"‚ but the rand’s response was "extraordinary".

story_article_left1

"From a close of under R13‚ the rand was quoted against the dollar at up to R14 in Asian trade this morning. The 7% rand loss compares with losses of 1% to 2% for most emerging market currencies." A level of R14 to the dollar is an all-time low.

The analysts said rand losses were making a September rate hike more likely from the South African Reserve Bank.

"The Reserve Bank could even move by 50 basis points. An emergency meeting‚ however‚ seems unlikely. Panic responses to try to stabilise the rand are no longer their reaction function. By contrast‚ it’s hard to believe the Federal Reserve will hike in September. This takes away some of the sting from the global market collapse‚" the analysts said.

Not everybody on social media was doom and gloom about the news.

‏@diamond_head tweeted: “And there are those who benefit when the rand plummets. Their bank accounts just get a little healthier”. ‏@Ph0mEe admitted to being one of them: “This is so exciting!!! The dollar is now 13.28 to the rand!! No greater time to be getting paid in dollars than NOW!!”

Many on social media expressed their confusion about why the currency was in freefall - @Mo_Artwell said: “Im clued up about a lot ‚ not much about economics‚ just read an article about the depreciation of the rand‚ & the jargon alone is tough”.

@bongzb626’s cryptic tweet was unlikely to make it clearer for him: “The Rand is so weak‚ that the nyaope boys from UK can come to SA and make it rain”.