South Africa's rand slides on fears over new virus strains, travel bans

JOHANNESBURG: South Africa's rand plunged on Monday, snapping a five-session winning streak, as concerns about a new, fast-spreading strain of the coronavirus saw some countries ban flights to and from the country.

At 1500 GMT, the rand was 1.3% weaker at 14.7275 per dollar, slightly better than its session-low 14.9100 hit in low-liquidity, early morning trade as investors digested information about the new virus strain.

The rand rallied around 4% last week to a near 11-month best as a global demand for emerging market currencies - spurred by stimulus hopes in the United States and the roll out of COVID-19 vaccines - boosted risk taking.

The rand, set to end 2020 where it began the year, near the 14.00 per dollar mark, came under renewed pressure, however, as at least five countries and airlines banned flights over the discovery of a new variant of the coronavirus.

Stocks also fell, with the Johannesburg Stock Exchange's Top-40 index closing 1.92% lower, at 53,644 points, and the broader All-Share index down 2.02% to 58,579 points.

Banks and other financial firms, which all suffer when the rand is weak and are among the most exposed to renewed virus restrictions and their economic impact, led the blue-chip index lower.

Wealth manager Investec was the biggest loser, down 9.5%, followed by First National Bank and Nedbank , which fell 7.7% and 6.6% respectively.

Bonds also dropped, with the yield on the government issue due 2030 adding 15 basis points to 8.855%.