Rand hits R17.70/$ low as SA suffers Stage 6 load shedding
The rand weakened to R17.70/$ for the first time since 2020 on Monday morning, with investors digesting a deteriorating outlook, as well as the economic fallout for SA of Stage 6 load shedding.
In early trade the rand had lost 0.8% to R17.739/$, bringing its year to date to above 11%, while it has now lost about 22% since its year-to-date high of R14.48/$ reached in late March.
The local currency has come under pressure in recent weeks due to a hawkish pivot from the US Federal Reserve, which has made clear it is prioritising fighting inflation over other economic considerations. Sentiment came under pressure last week after data showed US inflation in August slowed by less than expected, setting the stage for a third-consecutive 75 basis point hike later this week.
The increased intensity of load shedding is also hurting sentiment toward the local currency, Oxford Economics analysts said in a note on Monday, while emerging market equities were also under pressure last week due to concerns over the outlook for the Chinese economy, the world's second largest.
Data had showed last week that Chinese export growth fell in August for the first time since 2020, missing market expectations.
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