01 Jun 2023
South Africa's Rand fell to a new all-time low in early Thursday trade following weakening investor sentiment.
The Rand plummeted to a low of 19.9075 against the US Dollar, surpassing the previous record low of 19.8600. At the time of writing, the Rand was trading at 19.8900, over 0.8% down on the previous close.
"The Rand remains entrenched in the R19.50/R20.00 range, but short-term risks remain for a breach of the R20.00 level as investor outflows continue and exporter inflows remain limited," said TreasuryONE Currency Strategist Andre Cilliers.
Investor sentiment has increasingly soured following allegations from the US that South Africa had supplied arms to Russia in 2022 as well as deteriorating rolling blackouts, Reuters news agency reports.
This sent the Rand into a tailspin last month, declining more than 7% against the Dollar.
The greenback was last trading at 0.27% higher against a basket of rival global currencies.
Investor relief was given a boost overnight when the US House of Representatives passed a bill to suspend the $31.4 trillion debt ceiling, avoiding a default.
The bill will now head to the Senate, and the legislation could come into effect before the weekend, the Reuters report adds.
"This will reduce the degree of risk aversion and potentially trigger a move back towards riskier investment destinations," as per a research note by ETM Analytics.
Furthermore, at the time of writing, shares on the Johannesburg Stock Exchange were last trading higher, with the blue-chip Top-40 index increasing more than 1%.
In addition, South Africa's benchmark 2030 government bond was weaker on Thursday, with the yield rising 4 basis points to 11.340%.