The South African rand weakened today amid the concerns that the fiscal crisis in the European Union will afflict the pace of the global economic recovery, damping the demand for the riskier assets.
The rand also weakened on the uncertainty as to whether the central bank is going to keep the interest rates at the current level. The bank already has cut its main rate seven times since December 2008 to aid the country’s economy with the recovery from the recession and to boost consumer spending. The South African exporters and labor unions demand to decrease the rates in order to depreciate the currency, which they consider to be overvalued.
USD/ZAR rose today to 7.511 as of 9:40 GMT from the opening level of 7.450.
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