- February 8, 2022
- Posted by: Amos Ekow Coffie
- Category: Banking and Finance
The South African rand weakened against a stronger dollar in afternoon trade on Monday, as domestic headwinds also weighed with power utility Eskom announcing the resumption of schuduled power cuts barely hours after suspending the outages.
At 1500 GMT, the rand traded at 15.5050 against the dollar, 0.39% weaker than its previous close.
Eskom said scheduled power cuts would resume from 9 p.m. (1900 GMT) after more breakdowns at its ailing coal-fired power stations. It had only suspended outages on Sunday evening, when it said its generation capacity had recovered.
The outages are a major drag on Africa’s most industrialised economy.
Investors awaited economic cues from local data releases including December mining and manufacturing figures, as well as a State of the Nation address by President Cyril Ramaphosa due this week.
Ramaphosa typically uses the annual address to parliament to announce reforms in key policy areas. Previous addresses have laid out plans to overhaul Eskom and address the country’s power crisis.
January business confidence data is due on Wednesday, and December mining and manufacturing numbers are expected on Thursday.
“Strong prints would support the argument for a more hawkish South African Reserve Bank going forward, and could provide the rand with some added resilience in the face of a tightening global monetary cycle,” ETM Analytics said in a research note.
The government’s benchmark 2030 bond weakened, with the yield rising 4.5 basis point to 9.37%.
Stocks closed higher, with the Johannesburg Stock Exchange’s Top-40 Index rising 0.76% to 69,198 points and the broader All-Share Index climbing 0.63% to 75,680 points.
Exporters such as mining firms BHP Group, Anglo American and Glencore, whose exports become more competitive when the rand falls, were among the biggest winners of the day.