(Reuters) -South Africa’s rand tumbled on Thursday to its lowest since October 2020, as electricity cuts and worries about a global recession renewed pressure on the currency.
At 1502 GMT, the rand traded at 16.4000 against the dollar, 1.08% weaker than its previous close.
“The rand is down just over 1% against the U.S. dollar today continuing on after yesterday’s hawkish comments from Fed Chair Jerome Powell at the ECB Sintra Forum garnered support for the greenback,” said Warren Venketas, a DailyFX analyst.
“Coupled with Eskom and the extended rolling blackouts, the slump in commodities markets added to the upside move,” he added.
South African state power utility Eskom said it will continue power cuts on Thursday and Friday, citing a labour strike as the cause of the worst power cuts the country has seen in more than two years.
Statistics South Africa figures on Thursday showed May producer inflation quickened to 14.7% year on year from 13.1% in April.
Its trade surplus widened to 28.35 billion rand in May, from a revised 16.01 billion rand in April.
The May budget deficit widened to 17.13 billion rand from 5.44 billion rand a year earlier.
The government’s benchmark 2030 bond was lower, with the yield up 11.5 basis points to 10.535%.
(Reporting by Bhargav Acharya in Bengaluru and Anait Miridzhanian in Gdansk; Editing by Christopher Cushing and Josie Kao)
