The South African Rand is now trading against the US Dollar at its best rate since February 2019.
Despite various issues with Eskom and other SOEs, and conservative fiscal outlooks, the Rand has shown an incredible degree of resilience recently. For the second time in a week, the SA currency has once again dipped below the $1 : R14 mark, and it has designs on setting a yearly best.
At the close of play of Thursday, the Rand was trading at R13.90 to the US Dollar.
Why the Rand is performing at a five-month high in 2019: The country’s economic performance is tied to Eskom, and that can be nothing short of depressing at times. However, it has worked in South Africa’s favour here. BusinessTech report the PIC wants to convert its $6.4 billion holdings into equity in return for a say over Eskom’s management, including board representation.
For the Rand to make gains, the US Dollar sometimes needs to make losses. Federal Reserve chairman Jerome Powell highlighted risks to the US economy which point to an interest rate cut at the end of the month. That’s a certain way to spook the greenback in an international market, but their loss is very much South Africa’s gain.