Rand weakens sharply, setting scene for further fuel price rises
The local currency is at the mercy of a rampaging dollar, and SA bonds have not been spared
The rand was a lot weaker on Thursday morning, raising the prospect of yet another increase in fuel prices, which have been a political hot potato ahead of the general elections in 2019. Consumers and businesses are already grappling with record fuel prices. Earlier in the week, the price of unleaded 93 petrol rose 99c, unleaded 95 rose R1 and diesel increased by R1.24. Illuminating paraffin now costs an additional R1.04 and liquefied petroleum gas rose R1.79. The renewed weakness in the local currency comes at a time when international oil prices are at the multiyear highs, reigniting inflation concerns. The rand has suffered collateral damage from a strong dollar, which has drawn strength from rising US treasury yields, amid the probability of further US increase in interest rates. The yield on the benchmark US 10-year paper rose to 3.21% on Wednesday, its highest in seven years, after upbeat economic data including a private-sector jobs report. Oanda analyst Stephen Innes said th...
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