The rand has weakened by one percent in Asian trade on Monday morning, trading at R18.05 to the dollar, after having weakened by two percent on Friday.
This is mainly due to a dollar that continues to strengthen on the back of interest rate hikes in the United States, which cause treasury yields in the US to rise.
The two-year treasury bond is yielding four-point-two percent on expectations of further aggressive interest rate hikes by the Federal Reserve, putting pressure on equities and turning the dollar into a safe haven asset.
The stronger dollar is also weakening commodity prices, as a strong dollar makes commodities more expensive in other currencies than the dollar.
Besides the stronger dollar, Eskom’s rolling blackouts and inability to generate the electricity needed, are also putting pressure on the rand, as it creates an uncertain environment for economic growth.
Eighteen-rand-five cents to the dollar is the rand’s weakest level since May 2020, after having traded as strong as R14.50 to the dollar in April this year.
Thabo Mbeki calls on the government to fix the economy instead of relying on foreign loans
Former President Thabo Mbeki has called on the government to fix the economy instead of relying on foreign loans to keep the country going. He says it is possible to develop South Africa’s economy if people can stop stealing public funds.
Mbeki was engaging with students and diplomats at the University of South Africa (Unisa) in Pretoria on Wednesday last week. He has also lamented the skyrocketing level of unemployment.