File Image: IOL
South Africa's rand steadied yesterday as traders, eschewing big transactions despite poor unemployment figures and a warning of another loss from power utility Eskom, stayed on the sidelines ahead of a US monetary policy announcement.

At 5.15pm, the rand traded at 14.1800 per dollar, not far off Monday's close of 14.1650.

“Surprisingly, the dire (unemployment) number had no effect on the currency as anticipated US Federal Reserve interest rate cut overshadows local market events for the time being,” said Bianca Botes, a treasury partner at Peregrine Treasury Solutions.

The unemployment rate jumped to its highest since the global financial crisis more than a decade ago, piling more pressure on President Cyril Ramaphosa’s pledge to turn around a shrinking economy.

Meanwhile, power utility Eskom said it expected to make a loss of around R20 billion ($1.4 billion) in the 2019/20 financial year, a similar loss to the previous year due to a steep increase in debt-servicing and fuel costs.

Rating agencies Fitch and Moody’s last week both warned about fiscal pressure on South Africa and highlighted Eskom as a risk, pressuring the rand.

Equities closed weaker with the JSE’s all-share index down 1.37 percent to 57242 points, while the Top-40 index fell 1.48 percent to 51207 points. 

 Reuters