Rand plumbs fresh two-year lows, caught up in emerging-market storm and local recession
The rand slid to its lowest level in more than two years on Wednesday morning, while government borrowing costs rose to their highest since November, signalling a negative market view towards SA. The rand’s weakness gathered speed following data showing the economy slipped into a technical recession in the second quarter — the first time since 2009. The economic contraction raised concern about whether SA will be able to balance its books, as required by the major credit ratings agencies. The rand fell as much as 2% against the dollar, to its weakest point since May 2016, according to the Iress data. The yield on the benchmark R186 bond, meanwhile, spiked to 9.35%, from 9.22%. The rand has also been caught up in the storm brewing around emerging markets.
The Turkish lira was weaker on Wednesday, as were the Mexican peso and Russian rouble. The weak state of the local economy and the weaker currency will put the Reserve Bank in a quandary when its monetary policy committee meet...
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