You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App
Join our mailing list to receive top business news every weekday morning.

Rand weakens further

Slides to a record low.
Bonds also opened weaker. Image: Shutterstock

The rand weakened early on Monday, sliding to a record low, after the ratings agency Fitch cut the country’s credit rating on Friday for the second time in a week, pushing it further into sub-investment territory.

At 0645 GMT, the rand was down 0.3% to 19.11 per dollar, pulling back from 19.35, its weakest ever.

Fitch lowered its foreign-currency rating to ‘BB’ from ‘BB+” and assigned a negative outlook, forecasting a 3.8% contraction to the economy in 2020 and a fiscal deficit of 11.5% of GDP.

Read: Fitch downgrade sees rand slide to R19 against the dollar

The downgrade follows Moody’s decision in the last week of March to strip the country of its last investment-grade credit rating, a move which will see the country’s local-currency debt ejected from the benchmark World Government Bond Index.

South Africa’s economy went into the global novel coronavirus crisis already in it second recession in two years in the final quarter of 2019 and the 2020 outlook not much better.

South Africa reported 1 585 coronavirus cases as of late Saturday, with nine deaths, and is in its second week of a nationwide lockdown that has seen the economy grind to a halt and government explore emergency policy measures.

Bonds opened weaker, with the yield on the benchmark debt due in 20206 up 3 basis points to 11.465%.

In equities, retailer Woolworths said it expects profit for the 52 weeks to June 28 to fall more than 20% year-on-year due to a drop in sales owing to measures to prevent the spread of the coronavirus.

Read: Woolworths warns of likely 20% profit fall

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.


Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in to comment.


Really? The rand is weakening and the SARB lowers interest rates. Absolutely clueless. Now the rand is toast.

I think it’s a case of damned if you do, damned if you don’t. Lower interest rates are but a drop in the ocean of factors weighing in against the Rand.

True observation..

…the drop in interest rates …most likely will not encourage spending amongst the gen population. Hasn’t in the developed economies

Government bonds are trading very high, SARB’s repo rate will notsupport much government bond rates (they trades off years of junk status grading).

Mickey Mouse currency. How long before you use dollars on the streets of Cape Town like every other African nation?

End of comments.





Follow us:

Search Articles:Advanced Search
Click a Company: