Rand recovers from all-time low

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The South African rand pared losses on Friday after officials said the country had not approved any arms shipment to Russia late last year, recovering from an all-time low on another turbulent day for South African markets.

The currency has been pummeled this week by investor concerns over the worst power cuts on record that experts fear could get even worse, and a US allegation that a Russian ship loaded weapons and ammunition from South Africa in December.

The rand sank as low as 19.51 to the dollar in early trade, down more than 1.6% on its previous close, after JP Morgan predicted the South African economy would contract this year on expectations for deeper power cuts.

But by 11: 35 GMT it was down just 0.3%, after a South African minister and a foreign ministry spokesman said the country’s arms control committee had not sanctioned weapons being sent to Moscow.

The US ambassador to South Africa said on Thursday that he was confident a Russian ship had picked up weapons in South Africa, in a possible breach of Pretoria’s declared neutrality in the Ukraine conflict.

South Africa’s government has said it will open an inquiry led by a retired judge into the allegation and that the US has not provided it with evidence.

Further drivers for the rand could come from a briefing by Electricity Minister Kgosientsho Ramokgopa on government efforts to address the power woes.

Shares on the Johannesburg Stock Exchange rebounded on Friday from the previous session’s slump. The blue-chip Top-40 index and the All-share index had last recovered about 1.5% of their losses.

The rand is currently trading at 19.21 to the dollar.

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