The rand and oil prices broke record lows yesterday.
JOHANNESBURG - The rand and oil prices broke record lows yesterday with the local currency breaching the R17 against the dollar level as coronavirus concerns battered the markets and as investors forecast a large interest rate cut from the SA Reserve Bank .Economists said foreign investors were also nervous that South Africa’s Monetary Policy Committee would announce a large interest rate cut today, which made the rand less appealing.
The rand breached R17 against the dollar in early trade as the sell-off continued. By 5pm the rand was trading 42c lower at R17.05 against the dollar from the previous day's corresponding period. He said investors seemed to be pricing-in the probability of the SARB cutting interest rates this week amid the global chaos and widespread risk aversion. Otunuga said dollar strength and rand weakness might send prices beyond R17.
“South Africa’s long-term cost of borrowing has elevated, with the yield on the 10-year government bond rising above 10percent over the last few days from 9percent, as selling of risky assets has elevated in financial markets on the severe rise in risk aversion, Bishop said.
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