Rand puts up a fight against the US Dollar
JOBURG – South Africa's rand dips below R12 to the dollar for the first time since in almost three years.
On Wednesday morning, 24 January, South Africa’s rand traded below R12 per dollar for the first time since May 2015.
The rand reached R11.94 per dollar by 11.30am and was comparatively resilient throughout Wednesday morning, helped by a weak dollar.
It is reported that the stimulus came from the overseas markets which saw the dollar surprisingly settle on three-year lows against some of the major currencies tracked by Bloomberg.
Phillip Pearce, a trader at TreasuryOne Ltd in Johannesburg said that investors are finding South Africa favourable at the moment.
“The dollar is taking a pounding and global markets are still on the hunt for yield. There’s not a lot of risk going now. South Africa seems like a good bet,” said Pearce.
In addition to the weakened dollar, South Africa’s improving political environment is also rumoured to have added to the rand’s impressive performance. The election of Cyril Ramaphosa as the president of the ruling African National Congress (ANC) in December, last year, has fired-up confidence that South Africa may prevent more credit-rating relegations as the new leadership is expected to take steps to root out corruption and rekindle the ailing economy.
Pearce also predicts that the rand may even go as low as R11.50 per dollar if new leadership comes into place.
