The rand extended losses on Friday morning, putting the local currency on course for its biggest weekly drop against the dollar since March. The stronger dollar and mounting fear that rating agencies could soon downgrade SA’s credit rating piled pressure onto the rand. A sharply weaker currency stokes inflation, and comes at a time when oil prices are also rising. Brent crude is near $59 a barrel, its highest level since 2015. South African fuel prices are based on Brent crude, and a rising fuel price is also inflationary. "Of the 50c (move) in dollar/rand over the past two days, 30c can be ascribed to the budget and the other 20c to the surging dollar," Rand Merchant Bank currency strategist John Cairns said. "In aggregate, the move is super aggressive and we should eventually expect some recovery. However, both pressures are likely to persist for a while." Fitch Ratings, which already has SA’s debt rating below investment grade, said this week that the Treasury was straying from f...
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