The decision by the US government opened the door for Washington to impose economic penalties against companies or financial institutions that purchase Iranian oil when the current waivers expire next week.
Andre Botha, a senior dealer at TreasuryONE, said risky assets were on the back foot as Brent reached its highest level in 2019, as the US scrapped waivers to buy Iranian oil.
“Iran has vowed to close the Strait of Hormuz in retaliation, which will impact oil supply to global markets. This has caused a definite ripple effect for global risk and could see the rand tread a little water,” Botha said.
The rand, which was bid at R14.06 ahead of the long weekend, weakened to R14.30 against the dollar yesterday as the markets digested Eskom’s latest financial woes and geopolitical developments.