South African rand loses value ahead of S&P review

Photo: BBC

For the first time since Covid, the South African rand traded at 19.21000 against the dollar ZAR=D3, around 0.69% weaker than its previous close.

The dollar (USD) was last trading up around 0.37% at 102.98 against other global currencies after investors leaned towards the safe-haven asset as U.S. debt ceiling talks continue.

Photo: BBC

South Africa faces its worst blackouts on record, leaving households and businesses without power for up to 10 hours daily and crippling the economy. JP Morgan predicts a 0.2% contraction of the country’s gross domestic product for 2023.

Last week, the rand hit an all-time low of 19.5100 against the dollar following record power cuts and allegations that South Africa shipped weapons to Russia.

“Panic has eased, but (South African) markets … are settling at levels worse than before last week’s run,” Rand Merchant Bank analysts said in a research note.

“The impetus to break 19.00 (is) steadily failing,” they added.

South Africa’s Eurobonds fell up to 1.3 cents in the dollar, with the 2052 maturity down 1.318 cents to 80.47 cents at 0909 GMT, according to Tradeweb data US836205BE37=TE.

The benchmark local 2030 government bond ZAR2030= weakened, with the yield up 14 basis points at 10.895%.

Written by Manny King John

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