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South Africa’s rand fell on Monday, following other emerging market currencies, as the US dollar held firm amid global economic uncertainty. At 1538 GMT, the rand traded at 18,4275 against the dollar, 1,75 percent weaker than its previous close.
The US dollar made gains against other major currencies, with the dollar index =US dollar up about 0,13 percent at 111,97. A further escalation of the Russia-Ukraine war, policy worries in China following President Xi Jinping’s appointment of loyalists to the government, and Britain’s contest for a new prime minister, have all unsettled markets in recent days.
“South Africa… continues to see a score of risks from the external environment, including ongoing monetary policy tightening in advanced economies, which is driving rising domestic borrowing costs, while high inflation also adds to the pressure on bond yields,” Investec analyst Annabel Bishop said in a research note.
She said domestic factors including problems at state logistics group Transnet and state power utility Eskom had also contributed to rand weakness. This week, local investor attention turns to the South African government’s mid-term budget. — CNBCA.
Online Reporter