JOHANNESBURG (Reuters) – The South African rand hit a closing low against the dollar on Friday but hit a trading low after officials said late last year that they had not approved any arms exports to Russia. finished short of.
The currency plunged this week on investor fears over the worst blackout in history and US claims that a Russian ship picked up weapons in South Africa in December.
The rand recovered from an all-time low of 19.51 against the dollar earlier in the day, but closed at a record low of 19.33. It fell 4.7% this week, its biggest weekly drop in nine months.
“The risk of SA being seen as working with, or indeed working with, Russia should not be underestimated,” Investec chief economist Annabel Bishop said in a research note. rice field.
He said if South Africa proves to have helped Russia, it could lead to an even sharper depreciation of the rand, boosting inflation amid already worsening blackouts.
US Ambassador to South Africa Reuben Brigeti said he spoke with Foreign Minister Naledi Pandor on Friday “to correct misunderstandings left by my public remarks” about the Russian ship accusations.
JPMorgan forecast on Friday that South Africa’s economic output will contract by 0.2% this year due to rolling blackouts.
Further interest rate hikes
The depreciation of the rand has also heightened concerns about rising inflation, and the South African central bank’s interest rate hikes may take longer than expected.
“The rand is under pressure and it’s becoming more likely that the Reserve Bank will raise interest rates further than we expected at the last minute,” Jason Tuby, deputy chief emerging markets economist at Capital Economics, said in a note. Stated.
This could pose new challenges for investors and households already facing high inflation and debt service costs.
The Johannesburg stock market on Friday rebounded after falling the day before.
The Top 40 Blue Chip Index (.JTOPI) rose 1.85% and the All Stocks Index (.JALSH) rose 1.73%, both securing modest gains this week.
The benchmark 2030 Treasury bond price fell slightly, with the yield rising 8 basis points to 10.940%.
Reporting by Tannur Anders, Editing by Alexander Winning
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