South African rand slides as oil price surge pressures emerging market currencies
- The rand traded at 16.33 against the dollar , 0.4% down from its previous close
JOHANNESBURG: South Africa’s rand weakened against the dollar on Tuesday as a stronger greenback, high energy prices, and softer precious metals heightened concerns over inflation and a wider import bill.
At 0815 GMT the rand traded at 16.33 against the dollar , 0.4% down from its previous close.
Oil prices rose nearly 2% on Tuesday as concerns over supply disruptions lingered after attacks on Saudi Arabian energy infrastructure left the kingdom’s East-West pipeline offline.
This has weighed on the South African currency, as the country is a net importer of oil and therefore vulnerable to rising crude prices.
Gold , South Africa’s key export, was down 0.2% at $4,287.69 per ounce on Tuesday, after hitting its lowest point since August 7 on Monday.
“Lower gold and other precious metal prices are further weighing on the local currency,” said Wichard Cilliers, head of market risk at TreasuryONE. “However, the main concern remains the impact of the high oil price on the economy.”
On the Johannesburg Stock Exchange, the Top-40 index was last down 0.7% in early trade.
South Africa’s benchmark 2035 government bond was slightly weaker in early deals, as the yield rose 6.5 basis points to 8.89%.