Rand Meltdown Brings S. Africa Recession, Junk Rating Closer
- Central bank may be forced to take aggressive rate action
- Threat of credit-rating downgrade looms as growth slows
South Africa Rand Plunges as Much as 9 Percent
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South Africa is moving closer to a recession and possible credit-rating downgrade to junk after the rand collapsed and as investors lose faith in the ability of President Jacob Zuma’s government to stem the slide.
The currency of Africa’s second-largest economy crashed to a new record low of 17.9169 against the dollar early on Monday as market turmoil in China and a drop in U.S. stocks deterred risk-taking. The 9 percent slump in the rand was the most since 2008 and the biggest of emerging-market and major currencies tracked by Bloomberg.