The South African Rand has declined against the US Dollar and extended the worst fall among emerging-market currencies this year due to concerns over the stability of the country’s power supply.
Eskom Holdings SOC ltd, South Africa’s state owned electricity company has revealed that it is ‘very concerned’ about its coal supplies and its reserve energy. Economists are concerned that the risk of rolling blackouts has soared for this quarter and the prospect of energy problems for next year is ‘very high’. The energy crisis comes after a turbulent period at Exxaro Resources Ltd. Strikes at the company’s coal mines led to a shortage of supplies being received by the nation’s coal power stations.
Power cuts have the possibility of damaging industrial output and economic productivity, piling the pressure onto the Rand.
“Our bigger worry remains that there will be renewed blackouts,” John Cairns a currency strategist at Rand Merchant Bank in Johannesburg, said in e-mailed comments. “Eskom is running with tight capacity.”
As well as energy worries weighing down the currency, the Rand remains volatile to movements from the Eurozone. Doubts over whether lawmakers in Cyprus will approve a highly unpopular levy upon bank deposits could see the Euro weaken further with the Rand following suit.
The market is also being tentative towards the Rand as they await tomorrow’s release of the latest consumer inflation data and the Reserve Bank of South Africa latest interest rate decision.
Current ZAR Exchange Rates
The South African Rand to Euro exchange rate is currently trading at 0.0837
The South African Rand to US Dollar exchange rate is currently trading at 0.1083
The South African Rand to Pound Sterling exchange rate is currently trading at 0.0717
The South African Rand to Australian Dollar exchange rate is currently trading at 0.1045
The South African Rand to New Zealand Dollar exchange rate is currently trading at 0.1316
The South African Rand to Canadian Dollar exchange rate is currently trading at 0.1109
These exchange rates were correct as of 11:15 am GMT
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