The rand has lost more standing in trade on Thursday against the US dollar. The second day in a row this week that it has almost breached the R20 mark.
It should be noted that the rand is at its lowest since May, when South Africa had a diplomatic fallout with the US over the docking of the sanctioned Russian vessel Lady R in Simon’s Town.
At 12pm, the rand traded at R19.48 against the dollar. On Wednesday, it hovered at around R19.31.
The rand is trading at R20.50 to the euro; on Wednesday, it was R20.26.
TreasuryONE senior dealer Andre Botha did provide some good news, stating that the rand had not depreciated as much against other major currencies as against the US dollar.
Botha said the reason why the US dollar was appreciating as fast as it was currently was due to the US economy standing head and shoulders above the rest in terms of data and resilience to a higher interest rate environment.
He said that while the rest of the world was battling low growth with higher inflation, the US was seen as the country that had tackled it the best.
OUT OF OUR CONTROL
The rand is apparently caught up in a realignment of global currencies that was outside of the Reserve Bank’s control, according to central bank Governor Lesetja Kganyago.
Kganyago is more worried about inflation and is concerned about the exchange rate to the extent that it feeds into price pressures, according to Reuters.
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