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Rand firms after Trump’s tweet roar

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The rand has regained some lost ground following a sharp dip on U.S President Donald Trump’s Land tweet. The local currency has firmed to a just over 14 rand against the U.S dollar after it weakened to nearly R15, on Thursday.

 

The rand been volatile against the green back, this week. It started the week relatively weak on concerns over the looming trade war between the US and China.

On Wednesday the rand had strengthened to close to R14 to the dollar.  However this soon changed, after Trump took to twitter suggesting he was concerned about farm seizures and farm killings in South Africa.

In the tweet Trump told the world he’d asked Secretary of State Mike Pompeo to study South African “land and farm seizures” and the “large scale killing of farmers.” The rand lost 1 point 5 percent as a result.

The US state department has since addressed Trump’s tweet during a media briefing. The spokesperson said South Africa would not follow in Zimbabwe’s footsteps.

However, she said land expropriation without compensation risked sending South Africa down the wrong path.

Chief Economist at the South African Institute for Race Relations, Ian Cruickshanks, says the rand is likely weaken further in coming months. He says a weaker rand will increase the cost of living. This as South Africa generally imports more from abroad than it exports.

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