The rand has weakened by more than 1% on Monday, and continues to trade at its weaker level on Tuesday morning at R17, 60 to the US dollar.
This is, however, in line with weakness in other emerging market currencies on the back of a stronger dollar.
The dollar’s strength can in part be explained by the expectation of a continued rise in US interest rates to combat the highest inflation in around 40 years.
This makes the dollar attractive as a safe haven currency, as can be seen by inflows into US treasuries and rising treasury yields.
On top of dollar strength, Eskom’s continued rolling blackouts and lack of capability to deliver the electricity needed to grow South Africa’s economy, is causing foreign currency outflows.
This is also contributing to a weaker rand against a basket of major currencies.