The discovery of the Omicron variant and the rapid implementation of travel bans has led to rand weakness in recent weeks – despite the fact that the Covid-19 variant has subsequently been found in many other places across the world, says Investec chief economist Annabel Bishop.<\/p>\n
Bishop said that the travel bans are set to severely impact the country’s tourism, as well as South Africa’s exports and its foreign income.<\/p>\n
She added that the bans and variant concerns could also have a negative impact on the local currency which typically sees strength over the end-of-year holiday period.<\/p>\n
“The exchange rate, of the rand versus hard currencies, typically strengthens from November, right up to February of the following year, from foreign tourists rand purchases, while GDP experiences a lift from the hospitality, retail, tourism and other industries,” she said.<\/p>\n
“It is likely that the domestic currency will struggle to make substantial gains into year-end, and today has only limped somewhat stronger, into the R15.90\/dollar to R16.00\/dollar
\nrange, with the rand substantially weaker than it was mid-year at R13.40\/dollar.”<\/p>\n
Bishop said that the domestic currency would battle to return to a level of around R13.50\/dollar again, and would likely remain trading in the R15\/dollar to R16\/dollar over the course of the remainder of this year and next year, but with a strong risk of tending even weaker<\/strong>.<\/p>\n At 15h00 on Thursday (9 December), the rand was trading at the following levels again the major currencies:<\/p>\n