Rand hits record low ahead of Zuma address

The rand remained on the back foot against the dollar on Thursday (12 February) ahead of the state of the nation address to be delivered by President Jacob Zuma.

Reuters reported that the local currency hit an intraday worst level of R11.89 against the greenback on Wednesday, its weakest level for 13 years, and off a 2015 best of R11.24 reached last week.

The previous low in the past decade was when the currency closed at R11.78 to the dollar in 2008, amid a global economic crisis which saw markets across the world head crash and head into recession.

The ongoing electricity crisis in the country is a core contributor to the currency’s decline, with more financial woes in Greece and the lead up to Jacob Zuma’s SONA address adding to general bearish stance from investors.

Analysts will being keeping a watchful eye on how Zuma intends on tackling the country’s electricity shortage.

“With Greek talks not going anywhere, other risk currencies selling off, Eskom’s woes and the unedifying spectacle of the local state of the nation address coming up, it’s easy to think a decisive break higher is coming,” RMB currency analyst John Cairns said in a note, reported by Reuters.

By 15h30, ahead of Zuma’s address taking place at 19h00, the currency was fluctuating between R11.78 and R11.81 to the dollar.

ZAR vs USD
ZAR vs USD

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Rand hits record low ahead of Zuma address