Rand hits record lows against the British pound
The South African Rand traded at its worst level against the pound sterling on Monday, weakening to R21.2177 against the British currency amid negative undertones in China.
The Asian superpower, South Africa’s largest trading partner, revised down its estimate of 2014 economic growth by 0.1% to 7.3%, raising concerns about its economic well being.
China’s official growth rate of 7.4% in 2014 was the slowest pace since 1990, according to the Financial Times.
The SA currency has lost more than R10.00 against the Pound over the past five years, while its woes with the greenback continue amid economic internal concerns of its own.
The South African Reserve Bank (Sarb) increased the repo rate by 25 basis points to 6% per annum in July.
And on Saturday, Reserve Bank Governor Lesetja Kganyago said that the sharp fall in the rand “is not necessarily a bad thing” and that it need not be a worry, to the to the extent that it was part of a global foreign exchange rebalancing, Reuters reported.
Economist, Mike Schussler said that a slower Chinese economy has meant that commodity prices have come under pressure, with South Africa still a big commodity exporter.
“I think the the business confidence, and the confidence in investors in South Africa is also waning quickly,” he told Jacaranda FM.
The rand has also come under pressure against the US dollar in recent weeks, briefly weakening to its lowest level in a couple of trades, beyond R14.00, towards the end of last month.
In trade on Monday, the rand was at R21.19 to the pound, and at a 52-week range of R17.0375 – R21.558.
It traded at R13.94 against the dollar, closing in on its worst-ever level of R14.0682 achieved on 24 August 2015.
More on the rand
5 reasons for the weak rand – and what the SARB thinks about it
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