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Emerging market factors to blame for rand's dive - economists

In the early hours of Monday morning, the currency fell to over R15 to the dollar, marking a complete turnaround from the nine-month record low of around R14.11 on Friday.

Picture: Supplied.

JOHANNESBURG - Economists say that emerging market factors are to blame for the more than 10% dive in the rand-dollar exchange.

In the early hours of Monday morning, the currency fell to over R15 to the dollar, marking a complete turnaround from the nine-month record low of around R14.11 on Friday.

It is the rands lowest levels since June 2016, following massive falls in the Turkish lira after sanctions imposed on the country by US President Donald Trump.

It has since recovered to about R14.69 to the greenback.

Chief economist at Alexander Forbes, Isaiah Mhlanga: "It's part of that index. We were sold, which means we weakened together with Turkey, together with Brazil, together with Argentina. This now combined with our own internal issues of land expropriation without compensation, SOE debt problems..."

Meanwhile, Bianca Botes from Peregrine Treasury Solutions says the recent events are not localised.

"You will see that there's been a amassive spike in the rand against the dollar as well as the Turkish lira and the Russian rouble. While South Africa did save some structural elements that are different from other emerging markets, once you actually feed a sell-off in emergeing markets, investors unfortunately see it as a bundle."

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