Johannesburg — South Africa’s rand fell in early trade on Monday as the U.S. dollar scaled to a two-decade high amid growing concerns over slowing global economic growth and rising interest rates.
At 0617 GMT, the rand traded at 16.1400 against the dollar, 0.76% weaker than its previous close.
Surging inflation, the war in Ukraine, and tighter lockdowns against COVID-19 in Beijing and Shanghai, have left investors uncertain on many counts, but they are sure that U.S. interest rates are going up — and the dollar is following.
A stronger dollar makes high-yielding but riskier assets like the rand less attractive to investors.
Local focus this week will be on March mining and manufacturing numbers, which are due to be published on Thursday and will give some insights into the state of the economy in the first quarter.
Government bonds weakened alongside the currency, with the yield on the instrument due in 2030 up 5.5 basis points to 10.145%.
*Olivia Kumwenda-Mtambo; Editing: Toby Chopra – Reuters
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