Costs to rise as rand takes a beating
The rand reached 20.85 to the pound, 13.27 to the US dollar & 15.22 against the euro.
JOHANNESBURG - The fallout on global stock markets and South Africa's current account deficit have been cited as driving factors behind a further plummet in the rand.
This morning, the local currency has been hovering around the 20.85 mark against the pound after reaching a record low earlier this month.
The rand is at 13.27 to the US dollar and 15.22 to the euro.
Investment Solutions economist Chris Hart said there is also a withdrawal of capital from emerging economies.
With further pressure expected, food prices and inflation rates could be affected by the plunge.
Hart said, "It remains vulnerable because of the deficit that South Africa is running at the moment. A current account deficit, a budget deficit and also even a household deficit. And those deficits are helping to suck us into these problems and make us more vulnerable."
Last week, the US Fed hinted that it was moving towards a possible interest rate hike. LISTEN: The Money Show's Bruce Whitfield speaks to emerging markets strategist Mark Cudmore about the impact of the US dollar on African currencies.
LISTEN: The Money Show's Bruce Whitfield speaks to emerging markets strategist Mark Cudmore about the impact of the US dollar on African currencies.
This has put more pressure on the rand and a number of other currencies. In addition to this, the Chinese economy and the devaluation of the yuan have also affected emerging market currencies.