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South Africa’s rand tumbled over 2% against the US dollar on Tuesday, hitting R18.25 just after 17:00 local time.
The currency extended Monday’s losses as global risk-off sentiment increased.
2023-08-01, 12:29:26 p.m.
“After the [rand’s] strong advance through June, it was always vulnerable to a slight correction,” Danny Greeff, co-head of Africa at ETM Analytics told Reuters.
“This has been triggered by risk-off market sentiment globally, as seen in [emerging market] currency weakness,” added Greeff.
Its weakness on Monday came as China’s economic position rang alarm bells and “dampened risk appetite”, said Andre Cilliers, currency strategist at TreasuryONE.
On the Johannesburg Stock Exchange, the blue-chip Top 40 index last traded 0.05% stronger than its closing level on Monday.
South Africa’s benchmark 2030 government bond was also slightly weaker, with the yield up 7 basis points to 10.285%.
“[South Africa] does not look like an attractive investment destination at the moment and will need to maintain higher bond yields to keep itself funded with foreign capital,” Greeff added.
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