eBusiness Weekly
South Africa’s rand firmed on Monday to back below the key 15.00 per dollar mark, mostly on profit-taking and month-end positioning after a steep slide triggered by global coronavirus fears dragged the currency to its weakest level in three months.
At 0700 GMT the rand was 0.43% firmer at 14.9650 per dollar, having ended at 15.0300 on Friday.
Investors concerned about the spread of the coronavirus wiped more than $400 billion off the value of China’s stocks in the first trading session in two weeks after an extended Lunar New Year break as the death toll from the epidemic rose to 361.
The rand has tumbled 5.2% against the greenback since the beginning of the year, more than 4% of those losses in the past week as a risk-off emerging market selloff was accelerated by renewed signs the local economy remained weak.
The sharp fall in the rand after positive trade in December that saw the currency flirt with sub-14.00 levels has seen volatility measures spike, making holding the rand even tougher for investors to stomach.
“The rand has been in a steady decline as the spread of the coronavirus has seen markets exit risk assets in favour of safe havens. This scenario is likely to prevail until the spread of the virus is brought under control,” Nedbank analyst Reezwana Sumad said in a note.
“Locally, the ongoing load-shedding scenario is exacerbating the negative outlook for the local unit.”
State power firm Eskom on Friday resumed nationwide blackouts and said they would continue through the week as it carried out long-delayed maintenance on its creaking fleet of coal plants, threatening already slack consumer demand and business activity.
Bonds were steady, with the yield on the benchmark bond due in 2026 flat at 8.025%. – Reuters Africa
