The rand plunged by almost 8 percent against the dollar yesterday, touching its weakest level on a closing basis since January 1980, as investors fled riskier assets, with tumbling oil prices adding to nervousness spurred by the spreading coronavirus.
While global sentiment was the largest factor in the rand’s performance — with the currency seen as a proxy for its emerging-market peers — local factors including renewed rolling power cuts by Eskom and a downbeat assessment by Moody’s Investors Service of South African growth ahead of its ratings review later this month contributed to the selling pressure.
Eskom warned that its maintenance plan must be supported by the government or South Africa can expect regular blackouts from power cuts of 8 000 megawatts by mid-2021, a move that would cripple the economy. The power utility said it will implement rolling blackouts from 9 a.m. yesterday, which may continue until Thursday. – Bloomberg.
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