Rand slips 1% to the dollar as oil price jumps
The rand is under pressure from a weaker euro and rising oil price, raising the chances of an interest-rate increase in the coming months
The rand was weaker against major global currencies on Tuesday afternoon, taking its cue from a softer euro. The euro is under strain as the Italian government’s budget deficit continues to threaten a confrontation with the EU, with the euro at a four-week low against the dollar on Tuesday afternoon. A 2.7% rise in the price of oil has also put the rand on the back foot, with Brent crude rising earlier to a four-year high, touching $85 a barrel. It eased slightly on Tuesday afternoon, having fallen 0.13% to $84.90 a barrel by 3pm. At the same time, the rand was at R14.3774 from R14.2277, at R16.5851 to the euro from R16.4729, and at R18.6483 to the pound from R18.5511. The benchmark R186 bond was bid at 9.1% from 9.03%. Higher oil prices and a weaker rand will result in further petrol price hikes, which could see inflation breaching the 6% Reserve Bank inflation target, said Rand Merchant Bank analyst Mpho Tsebe. The Bank is likely to raise interest rates by 25 basis points before t...
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