Concern as rand drops to all-time low

2016-01-20 06:00

THE rand fell more than 10% at one stage to an all-time low of R17,9950 per dollar early Monday morning.

The continuing devaluation of the rand - it fell 25% last year - means consumers will likely feel the impact through higher prices for imported products such as maize, fuel and machinery in the first half of this year, analysts warned on Monday.

The currency depreciation has also added pressure on the Reserve Bank to increase interest­ rates this year, said Standard Bank analysts Walter de Wet and Shireen Darmalingam.

The currency is one of a number of negative factors that will weigh on the fortunes of consumers this year. The drought, the likelihood of an electricity price increase and the ­probability of a tax increase in the budget are also likely to squeeze consumers.

The rand’s decline- confidence in the currency is already weak due to low growth and other government policy ­issues - was triggered by a sell-off by ­retail ­investors in Japan, analysts said.

Emerging market currencies fell Monday following steep losses in Chinese shares - the Shanghai Composite closed down 5,3% from its previous day’s close.

“Global markets are still in the grips of China fears, and it is uncertain whether the Chinese­ government can do enough to reassure global investors,” said IG’s ­Angus Nicholson.

Global investors fear China may report much slower economic growth this year than anticipated.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.