Rand Weakens Past 17 per Dollar as US Recession Fears Mount
- South African currency set to extend drop despite fundamentals
- Slump in industrial metals, dollar strength to scupper rebound
This article is for subscribers only.
The rand weakened past 17 per dollar on Monday as the South African currency’s resilience is tested by fears of a US recession even as local fundamentals remain supportive.
History shows the rand tends to decline sharply when the world’s economic engine is in recession. Skipping the broad Covid-related slump in global markets in 2020, the US recessions of 2008/9 and 2001 knocked as much as 13% off the rand’s value. Based on Bloomberg scenario-planning tools, similar conditions this time round could see the rand weaken by about 12%.