The rand reached R15/$ for the first time in a week on Monday as Moody’s Investors Service revised down its 2020 GDP growth forecast for SA.

The ratings agency dropped its forecast to 0.7% in 2020 from the 1% it announced in November. It also lowered its 2021 growth prediction to 0.9% from 1.2% previously.

The ratings agency’s new forecasts came as it revised down its global GDP growth outlook due to contagion associated with the coronavirus epidemic in China. Moody’s said the virus posed new risks to the prospects of an “incipient stabilisation of global growth this year resulting from a truce in the US-China trade war and emerging signs of a pick-up in the industrial sector”.

The ratings agency expects G-20 economies to collectively grow by 2.4% in 2020, a softer rate than last year, followed by a pick-up to 2.8% in 2021.

Investec chief economist Annabel Bishop said after an attempt at consolidation at the start of a quiet week, ahead of the budget, with most emerging-market currencies flattish, the rand had weakened by the afternoon to above R15/$ as Moody’s cut SA GDP growth forecast, “inflaming downgrade fears”.

Emerging-market currencies are weaker since the start of the year, with losses in the rand “superseded only by [those of] the Brazilian real”, Bishop said.

At 6.18pm, the rand had weakened 0.67% to R14.9995/$, 0.69% to R16.2466/€ and 0.56% to R19.5152/£. The euro was little changed at $1.0834. The rand earlier reached a worst intraday level of R15.0198/$.

On Monday, China’s central bank cut lending rates again in an attempt to reduce the economic shock from the coronavirus outbreak. This comes as fears about the spread of the virus and its effect on the world economy take hold.

Earlier, Asian shares continued their recovery from losses sustained following the outbreak of the virus. The Shanghai Composite was near a three-week high on Monday, as China’s persistent efforts to contain it  calmed nervous investors, Reuters said, though Japanese stocks faltered on growing recession concerns.

According to an official from China’s National Health Commission, the coronavirus outbreak that has infected more than 70,000 people and caused 1,770 deaths in China is both “preventable and treatable”.

The JSE all share closed firmer, with platinums faring best. The all share gained 0.56% to 58,187.96 and the top 40 0.59%. The platinum index leapt 3.42%.

tsobol@businesslive.co.za