Fragile rand recovers a bit but market is trading ‘like a rat cornered by a snake’
The rand is still down nearly 3% against the dollar, heading for a third consecutive weekly loss
The rand staged a modest recovery in mid-morning, trade on Thursday, with sentiment around the local currency and broader emerging-market assets remaining fragile.The magnitude of the recent slide has raised inflation concerns, coming as concerns mount that the local economy possibly contracted in the second quarter.A contraction will mean that SA is in a technical recession, which is defined as two successive quarters of contraction. The scenario will punch holes in the "new dawn" narrative championed by President Cyril Ramaphosa.The rand is still down nearly 3% against the dollar, heading for a third consecutive weekly loss. While sustained rand weakness breeds inflation by pushing up the cost of imported goods, such as fertilisers in the case of agriculture, exporters tend to benefit from the weakness.At the very least, the weaker rand cushions the struggling local platinum and gold industry against the low dollar-denominated platinum and gold prices.Earlier in the week, South Af...
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