Violent protests add salt to COVID-19 wounds as Rand dips to two-month low

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FILE PHOTO: Supporters of former South African President Jacob Zuma block the freeway with burning tyres during a protest in Peacevale, South Africa, July 9, 2021. REUTERS/Rogan Ward/File Photo
  • Rand trading almost 2% lower than its last close
  • JSE down 0.6%
  • Protests worsening slumps already being caused by lockdown

Harare – The South African Rand has slumped to levels last seen at the close of April owing to violent protests against the arrest of former president Jacob Zuma disrupting economic activity.

By 13.00 pm today, the rand had dipped by as much as 1.9%, trading at 14.4883 against a single denomination of the U.S dollar.

Meanwhile, the Johannesburg Stock Exchange (JSE) fell by 0.6%.

This comes after protestors disrupted major transport networks in the nation’s two busiest and economically significant provinces, KwaZulu-Natal and Gauteng.

The rand was already under strain following the enactment of level four lockdown restrictions two weeks ago that included a ban on gatherings, a curfew from 9 pm to 4 am, and a prohibition on the sale of alcohol.

The morning after the announcement the rand traded at 14.1800 against the dollar, 0.37% weaker than its previous close.

Commenting on the development, Nedbank analysts in a market note said, “The scenario, although necessary, is likely to hamper an already faltering economy, and the rand is likely to remain under pressure, with any strength in the local unit likely to be met with fresh demand for USD.”

Fast forward, yesterday, the country’s president Cyril Ramaphosa, extended the strict lockdown by a further two weeks, meaning the currency was destined for further dips due to restricted economic activity besides the protests that have just made the situation worse.

Zuma was sentenced to 15 months in prison for defying a court order to cooperate with an inquiry into corruption during his tenure.

Equity Axis News

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