Johannesburg – The rand was flat against the US dollar before noon on Friday after the local currency weakened overnight after Fitch downgraded the country’s sovereign credit rating due to political and economic tension in the country.
“The weakness in the rand is mainly due to the downgrade of SA’s sovereign credit rating. It wasn’t a big surprise as this is not the first downgrade SA has received in the last few months‚ but it was not worked into the rand‚ this is why we saw the big move‚” said Mark Kalkwarf‚ a senior portfolio manager from the Iquad Group.
At 11:42‚ the rand was bid at R8.6584/$ from its previous close of R8.6566/$. The local currency was bid at R11.4975/€ from its previous close of R11.4872/€ and at R13.9516 against sterling from R13.9807 before.
The euro was bid at $1.3281 from its overnight close of $1.3272.
“Since yesterday the rand weakened considerably against the euro‚ by about 30 cents‚ if it wasn’t for the strength of the euro and other emerging market currencies‚ the rand would have weakened even further against the dollar‚” Kalkwarf said.
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