Rand falls 2% as Turkish lira continues to tank

File Image: IOL

File Image: IOL

Published Aug 17, 2018

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JOHANNESBURG - South Africa’s rand weakened 2 percent against the dollar, tracking its emerging market peers lower as the Turkish lira slid.

At 10:05 GMT, the rand traded at R14.99 per dollar, 1.78 percent weaker from its overnight close of 14.7275. Earlier it touched a session low of R15 03.

Emerging market currencies were under fresh pressure on Friday, with Turkey’s lira fell 7 percent to the dollar despite central bank measures earlier in the week.

“The Turkish Lira has been sold off quite aggressively and emerging markets are being put under a lot of pressure as a result,” said Andre Botha, currency trader at Treasury One.

The rand had recovered some losses in early trade after being rattled overnight by news that the opposition Economic Freedom Fighters had introduced a bill to nationalise the central bank.

Nedbank analysts wrote in a note that the nationalisation debate was likely to keep the local unit on the back foot.

The rand’s weakness this week has also come after concerns over South Africa’s economic outlook.

Government bonds also weakened, with the yield on the benchmark bond due in 2026 was up 11 basis points at 9.105 percent.

On the bourse, the All-Share index rose 0.50 percent to 56,844 points while the top 40 index was 0.58 percent higher.

The market recovered in tandem with South Africa’s Naspers shares, which rose 1.64 percent to R3,197 after weakening earlier this week when Internet giant Tencent Holdings posted its first surprise profit decline in nearly 13 years. 

On Friday, Tencent rebounded, rising 3.44 percent. 

-REUTERS 

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