adminThe rand halted a four-day winning streak after US President Donald Trump tweeted about South Africa’s land politics, sparking concern the country may become the next target for US sanctions.
The currency, the third-biggest decliner in emerging markets in the past three months, dropped as much as 1,9 percent against the dollar, the most among its peers, after Trump said he asked US Secretary of State Mike Pompeo “to closely study the South Africa land and farm seizures and expropriations”. The yield on the country’s benchmark local-currency bond due 2026 climbed 3 basis points to 8,94 percent, while the benchmark FTSE/JSE All Share Index gained 0,1 percent.
Trump’s sudden interest in the South African land-reform debate comes at a time when President Cyril Ramaphosa’s government, heading for an election next year, grapples with waning demand for emerging-market assets amid concern about trade wars and reduced stimulus in the developed economies.
“The rand is a very volatile currency and President Trump for some reason turning his attention to South Africa is clearly unwelcome,” said Chris Turner, the head of foreign-exchange strategy at ING Groep NV in London. — Bloomberg.
Online Reporter