South Africa's rand pauses plunge after Eskom fallout

South Africa's rand pauses plunge after Eskom fallout

Reuters  | Feb 12, 2019 02:20

South Africa's rand pauses plunge after Eskom fallout

JOHANNESBURG, Feb 12 (Reuters) - South Africa's rand steadied early on Tuesday following a sharp selloff in the previous session triggered by a sudden escalation of countrywide power outages.

At 0645 GMT, the rand ZAR=D3 was 0.16 percent firmer at 13.7825 per dollar, compared to its overnight close of 13.8050 in New York.

On Monday, the currency tumbled nearly 2.5 percent to its weakest in nearly three weeks as ailing power firm Eskom cut 4,000 megawatts from the national grid after seven generating units unexpectedly went offline. pressured by a resurgent dollar, the power outages sent the rand through crucial technical levels at 13.70 and then 13.80, opening the path to further falls.

"The rand is now trading firmly on the back foot due to the aforementioned factors, the most telling of which is Eskom, weighing on the economic outlook and any prospects of growth in S.A.," said analysts at Nedbank in a note.

Eskom, which supplies more than 90 percent of the power in Africa's most industrialised economy, is drowning in a 419 billion rand ($30 billion) debt and has seen its power plants deteriorate sharply due to years of mismanagement.

The national statistics agency is due to publish unemployment and manufacturing data later in the session, with any signs of further slowing of the economy set to add to the rand's woes.

Bonds were also weaker, with the yield on the benchmark government 10-year bond ZAR186= adding 2.5 basis points to 8.805 percent.

Stocks opened higher, with the Johannesburg Stock Exchange's (JSE) Top-40 index .JTOPI rising 0.6 percent to 47,574 points.

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (UK) English (India) English (Canada) English (Australia) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 中文 香港 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Are you sure you want to sign out?
Saving Changes