The rand hit a record low on Tuesday on the back of a strengthening dollar and souring local investor sentiment that has seen huge capital outflows from the country.
At 15.18 GMT, the rand traded at 19.690 against the dollar, about 0.09% weaker than its previous close. It hit a new low in early trade on Tuesday, touching 19.860 to the dollar.
The currency has lost more than 7% against the greenback since the start of the month and more than 15% since the beginning of the year.
Africa's most industrialised economy faces its worst rolling blackouts, which are further worsening persistent high inflation and pushing the central bank of continue to hike interest rates.
The dollar weakened slightly on Tuesday and was down 0.144% to 104.1 against a basket of global currencies. The index nonetheless remains close to a two-and-half-month high.
The dollar-rand exchange rate “is very much at the mercy of the US at present and will continue to do so until we get more clarity”, said DailyFX analyst Warren Venketas.
Greg Davies, head of wealth at asset manager Cratos Capital, said South Africa was a less desirable investment destination for international investors due to the power crisis.
Shares on the JSE were lower, with the blue-chip Top-40 index closing 0.73% weaker and broader all-share index ending the day 0.88% down.
The power crisis is also taking a toll on the earnings of some top companies with Tiger Brands, the country's biggest food producer, warning it might not be able to meet its profits for the year due to the blackouts.
“We've had poor results coming from Tiger Brands and Pepkor, two companies closely followed by foreigners,” said Casparus Treurnicht, analyst and portfolio manager at Gryphon Asset Management.
Tiger Brands shares crashed by more than 16%, while major retailer Pepkor lost more than tenth of its market value.
South Africa's benchmark 2030 government bond was weaker, the yield closing up 19.5 basis points at 11.315%, its highest level since the Covid-19 global market rout in early April 2020.
Reuters
Rand hits new low amid dollar strength, poor outlook
Image: Reuters
The rand hit a record low on Tuesday on the back of a strengthening dollar and souring local investor sentiment that has seen huge capital outflows from the country.
At 15.18 GMT, the rand traded at 19.690 against the dollar, about 0.09% weaker than its previous close. It hit a new low in early trade on Tuesday, touching 19.860 to the dollar.
The currency has lost more than 7% against the greenback since the start of the month and more than 15% since the beginning of the year.
Africa's most industrialised economy faces its worst rolling blackouts, which are further worsening persistent high inflation and pushing the central bank of continue to hike interest rates.
The dollar weakened slightly on Tuesday and was down 0.144% to 104.1 against a basket of global currencies. The index nonetheless remains close to a two-and-half-month high.
The dollar-rand exchange rate “is very much at the mercy of the US at present and will continue to do so until we get more clarity”, said DailyFX analyst Warren Venketas.
Greg Davies, head of wealth at asset manager Cratos Capital, said South Africa was a less desirable investment destination for international investors due to the power crisis.
Shares on the JSE were lower, with the blue-chip Top-40 index closing 0.73% weaker and broader all-share index ending the day 0.88% down.
The power crisis is also taking a toll on the earnings of some top companies with Tiger Brands, the country's biggest food producer, warning it might not be able to meet its profits for the year due to the blackouts.
“We've had poor results coming from Tiger Brands and Pepkor, two companies closely followed by foreigners,” said Casparus Treurnicht, analyst and portfolio manager at Gryphon Asset Management.
Tiger Brands shares crashed by more than 16%, while major retailer Pepkor lost more than tenth of its market value.
South Africa's benchmark 2030 government bond was weaker, the yield closing up 19.5 basis points at 11.315%, its highest level since the Covid-19 global market rout in early April 2020.
Reuters
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