The rand is paying the price for SA economic, political woes

The rand is paying the price for South Africa’s woes, with the R20 per dollar level now firmly in sight as investors fret about restrictive monetary policy adding to a deepening power crisis and political missteps to throttle the already ailing economy.

The currency plunged to a record 19.84 per dollar on Thursday after the South African Reserve Bank raised its policy rate to a two-decade high.

That capped six straight weeks of losses for the rand in the face of unprecedented electricity shortages and a diplomatic row with the US over South Africa’s ties with Russia. Options pricing shows an 80% chance that it will hit 20 within the next month.

The central bank said its restrictive policy stance was necessary to curb inflation, even as it warned that more rand weakness was likely. But the move will add strain to an economy that’s forecast to grow by just