Rand weakened by more than 1%

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The rand has weakened by more than 1% during Monday’s trading session and breached R19 to the US dollar for the first time in two weeks.

The rand is holding on to its weaker level on Tuesday morning, trading at R19.15 to the dollar in midday Asian trade.

This is mainly due to a stronger dollar, although trading volume was thin yesterday as US markets were closed due to a public holiday.

However, the rand is also reacting to an increase in Eskom’s rolling blackouts scheduled to Stage 6.

Prolonged power disruptions have a negative effect on the rand and the economy and are putting upward pressure on inflation, although CPI declined to a two-year low of 4.7% in July.

But most of all, a weaker rand is making imports, such as oil more expensive as is reflected in this month’s increase in the price of fuel.

Hefty fuel price hike for motorists