There have been scheduled electricity outages on every day this year, after a record number of days with outages in 2022. Photo: Scott Eells/Bloomberg
The South African rand slid on Monday, after ratings agency Moody's flagged risks from crippling power cuts and as the dollar advanced on investor bets that the U.S. Federal Reserve would keep monetary policy tight for longer.
At 12:10 pm, the rand traded at 18.0050 against the dollar, about 0.6% weaker than its closing level on Friday and breaking above 18 to the dollar for the first time since November, 2022.
On Friday Moody's said in an issuer comment on South Africa: "the (power) blackouts' effect on businesses, consumer sentiment and investment will weaken the country's already subdued economic growth prospects and threaten social and political stability".
There have been scheduled electricity outages on every day this year, after a record number of days with outages in 2022.
Last week President Cyril Ramaphosa declared a national "state of disaster" over the power shortages, giving the government additional powers including permitting emergency procurement procedures.
The dollar was up 0.1% against a basket of global currencies on Monday, with market attention firmly pinned on Tuesday's U.S. consumer price report and its implications for the Fed's interest rate trajectory.
No major South African economic data releases were due on Monday, but South Africa's latest consumer price report is due on Wednesday when retail sales figures will also be published.
The Johannesburg Stock Exchange's All-share index was up 0.4%. The government's benchmark 2030 bond was slightly weaker, with the yield rising 5.5 basis points to 9.920%.
Reuters