SA rand slides

Mixed denomination rand currency banknotes are arranged for a photograph at a First National Bank (FNB) branch in Johannesburg, South Africa, on Friday, March 15, 2013. A recovery in mining and manufacturing is giving South Africa's rand and bonds a breather amid concern that growth is slowing while inflation accelerates. Photographer: Nadine Hutton/Bloomberg via Getty Images

The rand’s slide continued in afternoon trade last Thursday, breaching R18,60 to the US dollar for the first time.

Global recession worries due to the Covid-19 pandemic and economic fallout, together with last week’s credit rating downgrade of South Africa to “junk” status by Moody’s, is weighing heavily on the currency.

The rand was trading at R18,62 to the US dollar by around 3:11pm last Thursday, which meant that the currency has depreciated by more than R4,60 this year alone. On Wednesday evening it closed at R18,27. Most emerging market currencies are also feeling the pain.

However, the rand continues to be the worst-performing currency against the greenback this year, as South Africa faces a worsening recession on the back of a 21-day coronavirus-induced lockdown.

The rand improved slightly to R18,53 by 4pm, compared to its earlier low of R18,62. – Moneyweb.