Rand off to weak start, stocks drop
They've taken their cue from weak global markets after soft Chinese factory data.
JOHANNESBURG - The rand has fallen by more than one percent against the dollar, and stocks have dropped more than 2,6 percent on the first trading day of 2016.
They've taken their cue from weak global markets after soft Chinese factory data rattled investors.
The local currency lost about a quarter of its value against the greenback in 2015, mainly as investors dumped emerging markets, in anticipation of higher US interest rates.
But concerns about weak growth in South Africa also weighed and the shock removal of Nhlanhla Nene as finance minister early last month, triggered a heavy sell-off that pushed the currency to a historic low of 16,04 to the dollar.
Economist Dawie Roodt said, "I am very concerned about where the currency currently is at it will lead to inflationary pressures and a higher interest rate. Eventually, it will lead to lower economic profits as well. Those people who were asking for a lower currency, they have that now. There are very little benefits from a lower currency. In fact, a lower currency simply means that we are all poorer today."