Share

Eskom's troubles take rand from hero to zero in one month

The rand has jumped from one extreme to another.

The currency, which gave a world-beating performance in January, will now record its worst February drop since 1996, as it takes the loser’s cup for the biggest decline against the dollar in a basket of emerging market currencies tracked by Bloomberg.

Global growth concerns and a spurt of dollar strength weighed on all developing-nation currencies in February. But Eskom’s operational and financial woes exacerbated the rand’s losses as investors mulled the implications for South Africa’s struggling economy.

The rand weakened for a third day on Thursday and traded at 13.9510 per dollar by 14:41 in Johannesburg. It’s down about 5% in February, the most it has lost in a month since August’s thrashing. It could continue to underperform in the months to come, with Eskom still a concern and global growth slowing, according to Piotr Matys, a London-based emerging-markets currency strategist at Rabobank.

“While the emerging-market currencies responded enthusiastically to the US Fed adopting a wait-and-see approach in January, we are of the view that capital inflows” may prove unsustainable unless the outlook for the global economy improves, said Matys.

“To our mind the Fed pausing the tightening cycle is a major warning signal that supports our concerns that the US economy faces the risk of recession next year. This in turn doesn’t bode well for emerging markets, especially those which rely on global demand for their services and goods.”

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.92
-0.1%
Rand - Pound
23.90
-0.0%
Rand - Euro
20.44
+0.1%
Rand - Aus dollar
12.35
+0.0%
Rand - Yen
0.13
-0.1%
Platinum
909.30
+1.4%
Palladium
1,015.00
+1.3%
Gold
2,220.40
+1.2%
Silver
24.86
+0.9%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.9%
Resource 10
57,251
+2.9%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders