SOUTH Africa’s rand slumped to a fresh record low against the dollar on a combination of worsening diplomatic tensions and economic risks.
The rand dropped as much as 1% to R19.87 per dollar, making it the worst performer this month among emerging markets. Its slide this year, only topped by the Argentine peso, is leading traders to look at an unprecedented breach of R20 per greenback.
The latest setback for investors is the government’s plan to provide diplomatic immunity to attendees of Brics meetings as it prepares to host Russian President Vladimir Putin at an August summit.
That’s added to power cuts that are hurting the economy, concerns over China’s growth and renewed gains in the US dollar.
“The rand market trades with a sense of inevitability about currency weakness,” said Robert Hoodless, head of currency analysis at InTouch Capital Markets, adding technically the R20.24 level looks important to hold
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