Looming power blackouts undermine rand

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NewRandMoney

Reuters.

Johannesburg - South Africa's rand edged lower against the dollar on Thursday, erasing gains made the previous day after state power utility Eskom declared a fresh power emergency and said it would have to impose blackouts for the first time in six years.

The rand was at 10.7155 to the dollar at 08:43 SA time, down more than 0.5 percent from Wednesday's New York close.

An easing of tensions between Ukraine and Russia in the last few days has buoyed the rand and other risky assets.

However, Eskom's announcement that there was a “strong possibility” it would have to implement rolling blackouts could hit sentiment towards Africa's biggest economy and drag the rand lower.

Rolling blackouts, known locally as 'load-shedding', caused misery for millions of South Africans during a severe power crunch in 2008 which cost the economy billions of dollars in lost output.

The yield on the 2026 government bond was 1.5 basis points lower at 8.55 percent while that on the 2015 paper declined 3 basis points to 7.05 percent. - Reuters


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