The ZAR as only R13.2907 against the dollar during the morning, down from close of R12.9682 on Friday. Against the euro‚ the rand was at R15.1906 from a previous close of R14.7617 and again the pound it took a real pounding to R20.8195 from R20.3531 and later up to R21.The euro was at $1.1429 from $1.1381 previously.
FNB’s Alex Smith told Algoa FM news the weakness is not specific to South Africa. He says most emerging market economies have been under severe pressure in recent referenced Turkey, Russia and Brazil who also had weak currencies lately. He feels the business sector stability is more important than the level of the currency, yet it may hurt business confidence.
Times Live quoted Rand Merchant Bank (RMB) analysts saying the weakness in the currency was due to fear about the Chinese economy which saw markets fall on Friday with the rand’s reaction to it being “extraordinary”.
The real bad news is that this could kickstart a rate hike as early as September by the South African Reserve Bank. This could hit consumers with dept very hard.
