As fears grow over the economic growth, the appetite for riskier assets has submerged. The rand opened weaker on Monday morning reflecting that of what was happening to other emerging markets.
Early on Monday, the rand was trading at 18.91 to the US dollar which is about 0.6% weaker than when it closed on Friday.
The rand fell by more than 4% to the dollar last week, which was due to the interest rate cut, which came as a surprise as well as the predictions that the economy would suffer a major contraction due to the coronavirus pandemic.
President Cyril Ramaphosa’s cabinet is expected to discuss the new measures to contain the economic impact of Covid-19, which will include if the ailing SAA should be closed, which has had a major drain on state resources.
Before the first case of Covid-19 was detected in the country, the public finances of South Africa, were already in a bad state, which constrained its ability to provide stimulus.
At the time of writing, 3158 coronavirus cases were recorded and as of Sunday, there have been 54 deaths.
In early trade, it was mixed for South African government bonds. The yield dropped to 10.29% down by 6 basis points for the 2030 instrument after rising earlier.
Article Source: https://af.reuters.com/article/southAfricaMarketNews/idAFL8N2C811A