South Africa’s rand fell more than 1 percent on Friday as the country reported its first two deaths from the coronavirus.
File image: IOL
South Africa’s rand fell more than 1 percent on Friday as the country reported its first two deaths from the coronavirus. File image: IOL

SA's first coronavirus deaths drive rand lower

By Mfuneko Toyana Time of article published Mar 27, 2020

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JOHANNESBURG - South Africa’s rand fell more than 1 percent on Friday as the country reported its first two deaths from the coronavirus and a sharp jump in new infections, just as a three-week national lockdown commenced to try to curb the outbreak.

At 0740 the rand had weakened 1.34 percent to 17.5410 per dollar from an opening level of 17.3550.

The losses followed an announcement from the health ministry that two people had died in the Western Cape province and cases had risen to more than 1000, from 927 on Thursday.

The currency had traded steadily overnight.

The rand, along with other emerging market currencies that have suffered heavy losses as the threat of global recession grew, was boosted in overnight trade as the dollar fell on news the number of US citizens filing jobless claims had soared.

An unprecedented policy decision by South Africa’s central bank on Wednesday, which will see it buy an unlimited amount of government bonds, as well as extend repurchase facilities to commercial lenders, has also supported demand for local assets.

But a credit review due on Friday from Moody’s, the last of the top three agencies to rate South Africa’s debt at investment level, is likely to add downward pressure, traders said.

Bonds were weaker after a rally in the previous session. The yield on the benchmark paper due in 2026 was up 8 basis points to 10.415 percent.

Stocks opened lower, with the Johannesburg Stock Exchange’s (JSE) Top-40 index down 0.35 percent 40,968 points.  

Reuters

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