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Rand weakens further in Asian markets

  • File image: South African R1 coins.
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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.

“They are talking of monies that are worth more than R10 trillion. But is it a huge sum of money that is available? We don’t need to go to World Bank or out of the country or anywhere. It’s possible to focus on the matter of the recovery of the economy. It comes back to the question of leadership,” says the former president.

“Even to reduce the number of our people who are on social grants. What it means (is that) there are so millions of us who don’t have jobs. That’s why they have to depend on grants. You can’t boast about that,” he adds.
Furthermore, the former president says a wealth tax in South Africa would only succeed if it’s properly implemented. He says in principle there is nothing wrong with such an idea.

However, he has warned that such a decision should not be rushed.

“If necessary calculations are done, how much work would have to be done in order to collect it, and its implications for administering that tax? It’s a larger social impact. If those entire things are done and it’s agreed that there should be a wealth tax, in principle I don’t think there is any problem with it, but again, we come to the question (that keeps) arising that it requires thinking and proper calculation and you take a decision like that. But in principle, there is nothing wrong with a wealth tax,” says Mbeki.

Former President Thabo Mbeki engaged students from different countries and diplomats at Unisa:

 

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