Popular Topics
20°C / 22°C
  • Thu
  • 29°C
  • 15°C
  • Fri
  • 24°C
  • 16°C
  • Sat
  • 29°C
  • 16°C
  • Sun
  • 29°C
  • 16°C
  • Mon
  • 23°C
  • 15°C
  • Tue
  • 22°C
  • 15°C
  • Thu
  • 25°C
  • 14°C
  • Fri
  • 20°C
  • 12°C
  • Sat
  • 22°C
  • 15°C
  • Sun
  • 24°C
  • 14°C
  • Mon
  • 26°C
  • 16°C
  • Tue
  • 23°C
  • 17°C
  • Thu
  • 33°C
  • 17°C
  • Fri
  • 29°C
  • 18°C
  • Sat
  • 32°C
  • 18°C
  • Sun
  • 31°C
  • 18°C
  • Mon
  • 23°C
  • 17°C
  • Tue
  • 21°C
  • 17°C
  • Thu
  • 31°C
  • 17°C
  • Fri
  • 27°C
  • 17°C
  • Sat
  • 31°C
  • 17°C
  • Sun
  • 31°C
  • 18°C
  • Mon
  • 26°C
  • 17°C
  • Tue
  • 22°C
  • 17°C
  • Thu
  • 27°C
  • 20°C
  • Fri
  • 30°C
  • 20°C
  • Sat
  • 26°C
  • 21°C
  • Sun
  • 23°C
  • 20°C
  • Mon
  • 24°C
  • 20°C
  • Tue
  • 28°C
  • 22°C
  • Thu
  • 22°C
  • 18°C
  • Fri
  • 22°C
  • 19°C
  • Sat
  • 20°C
  • 17°C
  • Sun
  • 21°C
  • 16°C
  • Mon
  • 22°C
  • 15°C
  • Tue
  • 23°C
  • 18°C
  • Thu
  • 30°C
  • 13°C
  • Fri
  • 25°C
  • 12°C
  • Sat
  • 23°C
  • 16°C
  • Sun
  • 27°C
  • 13°C
  • Mon
  • 31°C
  • 15°C
  • Tue
  • 27°C
  • 15°C
  • Thu
  • 22°C
  • 15°C
  • Fri
  • 21°C
  • 13°C
  • Sat
  • 20°C
  • 15°C
  • Sun
  • 22°C
  • 14°C
  • Mon
  • 24°C
  • 16°C
  • Tue
  • 21°C
  • 16°C
  • Thu
  • 33°C
  • 19°C
  • Fri
  • 32°C
  • 19°C
  • Sat
  • 35°C
  • 20°C
  • Sun
  • 35°C
  • 19°C
  • Mon
  • 27°C
  • 18°C
  • Tue
  • 24°C
  • 18°C
  • Thu
  • 34°C
  • 17°C
  • Fri
  • 32°C
  • 18°C
  • Sat
  • 32°C
  • 16°C
  • Sun
  • 34°C
  • 14°C
  • Mon
  • 34°C
  • 18°C
  • Tue
  • 31°C
  • 19°C
  • Thu
  • 31°C
  • 14°C
  • Fri
  • 31°C
  • 17°C
  • Sat
  • 33°C
  • 16°C
  • Sun
  • 28°C
  • 19°C
  • Mon
  • 22°C
  • 18°C
  • Tue
  • 22°C
  • 18°C
  • Thu
  • 23°C
  • 16°C
  • Fri
  • 23°C
  • 16°C
  • Sat
  • 19°C
  • 15°C
  • Sun
  • 21°C
  • 14°C
  • Mon
  • 24°C
  • 14°C
  • Tue
  • 22°C
  • 16°C

Rand drops to new record low

The rand has once again dropped to record lows against the US dollar, reaching R17,99.

There have already been warnings about the effects this will have on the South African Reserve Bank and the country's immediate economic future.

JOHANNESBURG - The rand has once again dropped to record lows against the US dollar during what's been described as erratic trade on Asian markets, reaching R17,99 overnight.

The drop happened in markets with low liquidity and the currency has since recovered to around R16,73.

There have already been warnings about the effects this will have on the South African Reserve Bank and the country's immediate economic future.

Chief economist at ETM Analytics George Glynos says, "South Africa remains under a great deal of pressure. I think this is going to elevate pressure on the Reserve Bank. This kind of volatility could very well prove recessionary for South Africa."

The cause of the recent drop of the rand to record levels against the US dollar has been attributed to emerging market turn offs as well as statements by President Jacob Zuma.

Glynos says Zuma's statement's justifying his reshuffle of former finance minister Nhlanhla Nene may have sparked the rand panic.

"I can't really find anything other than President Zuma playing down the events of last year."

Co-head of research at Rand Merchant Bank (RMB)'s Global Markets, John Cairns says the Chinese market collapse contributed significantly.

"China's stock market collapse of last week continued into this morning and has generated pressure on all high risk assets."

PREVIOUS DROP

Last week, the rand fell to a previous record low, despite a generally weaker greenback, and stocks dropped more than two percent as renewed concerns about China's economy spurred an emerging markets sell-off.

The fall in the currency largely reflected a retreat in broader emerging currencies as China accelerated the yuan's depreciation, heightening concerns over the world's second-largest economy.

The rand was also victim to South Africa's weak economic fundamentals, with data showing deteriorating business confidence in Africa's most advanced economy.

Comments

EWN welcomes all comments that are constructive, contribute to discussions in a meaningful manner and take stories forward.

However, we will NOT condone the following:

- Racism (including offensive comments based on ethnicity and nationality)
- Sexism
- Homophobia
- Religious intolerance
- Cyber bullying
- Hate speech
- Derogatory language
- Comments inciting violence.

We ask that your comments remain relevant to the articles they appear on and do not include general banter or conversation as this dilutes the effectiveness of the comments section.

We strive to make the EWN community a safe and welcoming space for all.

EWN reserves the right to: 1) remove any comments that do not follow the above guidelines; and, 2) ban users who repeatedly infringe the rules.

Should you find any comments upsetting or offensive you can also flag them and we will assess it against our guidelines.

EWN is constantly reviewing its comments policy in order to create an environment conducive to constructive conversations.

comments powered by Disqus