Rand Volatility Tops Global Peers as South Africa Risks Mount
- Threat of rating downgrade fuels currency, bond sell-off
- Unicredit recommends shorting rand ahead of budget, election
This article is for subscribers only.
South Africa’s rand is back on its perch as the world’s most volatile currency as investors price in the risk of a credit-rating downgrade while awaiting details of the government’s rescue plan for the state-owned electricity company.
The currency fell for a second day against the dollar on Thursday to levels last seen in early January, and bond yields rose to their highest this year after President Cyril Ramaphosa said little to reassure investors about a turnaround plan for Eskom Holdings SOC Ltd. The rand’s three-month implied volatility climbed for a ninth day, overtaking the Turkish lira, as traders anticipate wider price swings in the run-up to elections in May.