ADVERTISEMENT

Rand buckles as commodity slide hurts emerging markets

By 1415 the rand had recovered some ground to trade 1.9 percent weaker at 15.1480 per dollar, near its worst level in a month as commodity-linked assets across the board suffered.

A South African child holds a 50 rand note. Reuters\file

South Africa's rand retreated more than two percent on Monday after a global commodity selloff and a firmer dollar put emerging assets under pressure, with record domestic unemployment adding to its woes.

"Commodity currencies are all coming under pressure, with commodity prices under pressure and the dollar rising, so you would expect the rand to come under pressure as well," said managing director and chief economist at ETM Analytics George Glynos.

The rand was on the front foot in early trade, boosted by Moody's decision on Friday not to downgrade the country's debt, but quickly lost ground as global risk sentiment soured as growth concerns returned, while creaking fundamentals locally also weighed.

Data for the first quarter showed unemployment rose to 26.7 percent, its highest level on record, rekindling worries over government's ability to revive the economy and avoid downgrades to subinvestment by two other ratings agencies.

ADVERTISEMENT

Fitch and Standard & Poor's have the country just one notch above subinvestment grade, and are due to make their decisions in June.

Finance Minister Pravin Gordhan on Monday said he would seek to convince Fitch and S&P that the country is on the right economic track, but some analysts see politics as a major risk to implementation ahead of local elections in August.

"Today's employment figures are very grim, but tell us little that we didn't already know about South Africa's troubled labour market. The political impacts may be more significant," said Africa analyst at Capital EconomicsJohn Ashbourne.

On the bourse resources stocks were also hit by the commodity selloff, with AngloGold Ashanti the biggest decliner among blue chips, sliding almost 10 percent. Global mining group Anglo American lost almost 8 percent.

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.
ADVERTISEMENT

Eyewitness? Submit your stories now via social or:

Email: eyewitness@pulse.ng

Recommended articles

Governor Idris plans to transform political thugs into employers of labour

Governor Idris plans to transform political thugs into employers of labour

Wike set to use ₦1.15trn to transform FCT, rural communities for better living

Wike set to use ₦1.15trn to transform FCT, rural communities for better living

16 victims kidnapped in Katsina rescued after 46 days in captivity

16 victims kidnapped in Katsina rescued after 46 days in captivity

You can go to prison for 7 years in Nigeria for using underage housemaids

You can go to prison for 7 years in Nigeria for using underage housemaids

Peter Obi explains why he joined Muslims to break fast in Abuja mosque

Peter Obi explains why he joined Muslims to break fast in Abuja mosque

Plateau commission demands justice for rape and murder of 9-year-old girl

Plateau commission demands justice for rape and murder of 9-year-old girl

Peter Obi breaking fast with Muslims in Abuja mosque gets Nigerians talking

Peter Obi breaking fast with Muslims in Abuja mosque gets Nigerians talking

Video of weird school competition shows young students licking one another's feet

Video of weird school competition shows young students licking one another's feet

UniCal records highest number of first class graduates in 49 years

UniCal records highest number of first class graduates in 49 years

Pulse Sports

Super Eagles Bright Osayi-Samuel punches pitch invader as violence erupts following Trabzonspor vs Fenerbahce

Super Eagles Bright Osayi-Samuel punches pitch invader as violence erupts following Trabzonspor vs Fenerbahce

Naija Stars Abroad: Moffi, Chukwueze battle Oshoala, Echegini for POTW

Naija Stars Abroad: Moffi, Chukwueze battle Oshoala, Echegini for POTW

Report: Super Eagles get new coach for Ghana and Mali clash

Report: Super Eagles get new coach for Ghana and Mali clash

Osimhen misses out on N17b payday after Napoli's UCL loss to Barcelona

Osimhen misses out on N17b payday after Napoli's UCL loss to Barcelona

‘Thank you’ - Osimhen’s girlfriend Stefanie Ladewig grateful for being the mother of his child

‘Thank you’ - Osimhen’s girlfriend Stefanie Ladewig grateful for being the mother of his child

4 reasons why Victor Osimhen should choose Arsenal over Chelsea, Manchester United and PSG

4 reasons why Victor Osimhen should choose Arsenal over Chelsea, Manchester United and PSG

ADVERTISEMENT
ADVERTISEMENT