JOHANNESBURG: South Africa's rand steadied in early trade on Friday after tumbling more than 2 percent the previous session, weighed down by news that the country's current account deficit widened in the third quarter and woes at state-run power firm Eskom.
* At 0630 GMT, the rand traded at 14.0600 per dollar, not far off its New York close of 14.0450 in the previous session.
* Data released on Thursday showed the current account deficit widened to 3.5 percent of gross domestic product in the third quarter, and a warning by Eskom that it may restructure its debt saw the rand slide to 14.2100, its weakest since Nov. 16, in the previous session.
* Africa's most industrialised economy has experienced a week of nation-wide power outages, known as load-shedding, which Eskom has blamed on low coal supplies as well as maintenance of its ageing fleet of power stations.
* "The biggest threat to the (South African) economy remains the embattled Eskom," Bianca Botes, treasury manager at Peregrine Treasury Solutions, said in a note.
* "The effect of an extremely strained fiscus, coupled with load shedding, spells disaster for future economic growth."
* Botes added that the rand would also remain under pressure as the trade war hangs over the global market environment, seeing investors rapidly dumping riskier assets for safe havens.
* Investors are also eyeing U.S. payrolls data later in the session for trading cues.
Comments
Comments are closed.