Rand weakens for third day on power crunch

Johannesburg – The rand weakened against the US dollar for the third straight session on Tuesday, pressured by concerns over the damage persistent electricity blackouts will have on a stuttering economy.

Eskom said on Tuesday it had widened power outages and there would be rolling blackouts for a second day in a row.

"Eskom blackouts are proving a regular problem," said Bart Stemmet, an analyst at NKC Independent Economists.

At 15:31 GMT, the rand was 0.7% weaker at 11.5375 versus the dollar.

READ: Power supply tight for rest of summer

The currency had rallied to 7 week highs last week after the European Central Bank said it would buy €60bn worth of assets each month to try and stimulate growth in the euro zone.

But a Standard & Poor's downgrade of Russia's sovereign credit downgrade on Monday ended any support for the rand from wider emerging market buying.

"The broader negative emerging market sentiment is having an impact. I think the rand strengthened too far last week and we're seeing a bit of a correction," Stemmet said.

Traders had one eye on Thursday's monetary policy statement for the central bank's latest inflation and gross domestic product projections, although the market has largely priced in a "steady" call on interest rates.

All 37 economists surveyed by Reuters predict the Reserve Bank would hold interest rates at 5.75%.

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