JOHANNESBURG - Market analyst Andre Botha said on Wednesday that the scathing statement by ratings agency Moody' Investor Services on Eskom's bailout has caused the rand to weaken even further, trading near R15 to the dollar on Tuesday.
The local currency had already weakened to a low of R14.96 against the greenback on Monday following another escalation in the trade war between Beijing and Washington.
Botha, senior dealer at financial services provider TreasuryONE, said the rand traded all the way down to the R14.77 level on Tuesday, as some of the risks associated with risky assets seem to dissipate as the general feeling was that the market was overextended.
Moody's released a statement on Tuesday saying that the billions of rand transferred to Eskom will not solve its financial crisis and will not stabilise the company’s debt burden.
Eskom last week reported a R20.7 billion loss for the year ended 30 March as operational and debt servicing costs keep rising. The power utility was last month allocated another R59 billion for the next two years in the special appropriations bill, but Moody's slammed this.