Rand volatility tops global peers as SA risks mount
Currency fell for a second day against the dollar to levels last seen in early January
The rand is back on its perch as the world’s most volatile currency as investors price in the risk of a credit-rating downgrade while awaiting details of the government’s rescue plan for power utility Eskom. The currency fell for a second day against the dollar on Thursday to levels last seen in early January, and bond yields rose to their highest in 2019. The rand’s three-month implied volatility climbed for a ninth day, overtaking the Turkish lira, as traders anticipate wider price swings. Eskom cut electricity supplies for a fifth day on Thursday and warned its power-generation system remains “vulnerable”. The blackouts are “having a devastating impact on our economy and on the ordinary lives of people”, President Cyril Ramaphosa said in comments broadcast on eNCA. Moody’s Investors Service has flagged the utility’s woes as credit-negative. “We think there is more scope for a higher-risk premium to be priced in the currency,” said Kiran Kowshik, a London-based emerging-market cur...
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