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WATCH: March 2020 Economic Update

The rand dropped to a record low.

  • Panic reverberated across world markets early in March, fuelled by the spread of Covid-19, and the slump in oil prices following the oil price war between Saudi Arabia and Russia.
  • The oil markets crashed hitting Sasol hard impacting its share price which dropped more than 44% on the 9th, which is the firm’s biggest day slump in history.
  • Gold commodity, prized as a safe shelter by many investors during episodes of economic turmoil and uncertainty, soared to a seven-year high on the commodity market as traders sought relief from the detrimental effects of Covid-19. Gold reached a high of $1 709 per ounce as of March 9 2020.
  • The US Senate approved a historic $2 trillion stimulus deal as a result of the ongoing ravaging effects of coronavirus, with New York City now becoming the US epicentre of the deadly virus.
  • The effects of the coronavirus have hit the US job market hardest with more than 3.2 million people filing unemployment insurance in the last week.
  • Since the origin of the coronavirus in late December 2019 in Wuhan, China has successfully managed to combat the spread of the virus, recording near zero new cases.
  • Life is almost back to normal in much of China as most returned to work on the 24th. Shops have reopened, manufacturing activity is slowly starting up again and traffic is starting to build up on the roads. Wuhan, however, where the Covid-19 pandemic originated, will remain in lockdown until April 8.
  • Italy is the world’s hardest-hit country in terms of the number of deaths. Italy reported in one day 919 deaths, which was the highest daily figure recorded since the Covid-19 outbreak. As of March 31, Italy has a total number of 11 591 deaths. They have now decided to extend lockdown but there is some hope as the country has reported a decline in the infection rate.
  • 114 South Africans who were repatriated from Wuhan earlier this month amid the global outbreak of the coronavirus, are set to reunite with their families after going through quarantine at The Ranch Resort in Polokwane
  • On the evening of March 23 2020, President Cyril Ramaphosa announced that South Africa is to go into a 21-day lockdown from midnight on March 26 2020, to reduce the spread of this devastating virus on the country.
  • South Africa’s rand fell to a record low and bond yields soared after the country lost its last investment-grade credit rating by Moody’s. Investors have anticipated it may slide deeper into junk as the spread of the coronavirus destroys the economy.

After the Moody’s downgrade announcement, the currency dropped as much as 2.5% to R 18.09/$, breaching R18 versus the dollar for the first time.

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Michael Haldane

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