JOHANNESBURG: South Africa's rand weakened against the US dollar for the third straight session on Tuesday, pressured by concerns over the damage persistent electricity blackouts will have on a stuttering economy.
South Africa's troubled power utility Eskom said on Tuesday it had widened power outages and there would be rolling blackouts for a second day in a row.
"Eskom blackouts are proving a regular problem," said Bart Stemmet, an analyst at NKC Independent Economists.
At 1531 GMT, the rand was 0.7 percent weaker at 11.5375 versus the dollar.
The currency had rallied to 7 week highs last week after the European Central Bank said it would buy 60 billion euro ($67.28 billion) worth of assets each month to try and stimulate growth in the euro zone.
But a Standard & Poor's downgrade of Russia's sovereign credit downgrade on Monday ended any support for the rand from wider emerging market buying.
"The broader negative emerging market sentiment is having an impact. I think the rand strengthened too far last week and we're seeing a bit of a correction," Stemmet said.
Traders had one eye on Thursday's monetary policy statement for the central bank's latest inflation and gross domestic product projections, although the market has largely priced in a "steady" call on interest rates.
All 37 economists surveyed by Reuters predict the Reserve Bank would hold interest rates at 5.75 percent.
Comments
Comments are closed for this article.