The main news out yesterday, “South Africa enters a technical recession”.  This hit the Rand even harder yesterday with a level of 15.38, into late afternoon. On the market, we opened around the same level this morning. As released in our Daily Rand Traders view, we expected to see a high of 15.65 either today or tomorrow. In the end, we extended even further than this, with the Rand hitting a fresh high of R 15,69 to the US Dollar, R 20,12 to the Pound and R 18,11 to the Euro.

Local Government borrowing costs have risen to the highest levels we’ve seen in a year. The bottom line is the economy just isn’t performing. With two consecutive quarters declining, the South African economy has entered a technical recession which has triggered a major Rand selloff. A weak economy and an even weaker currency is going to put the Reserve Bank under pressure when it meets later in the month to discuss South African monetary policy and interest rates.

For more information about the Rand or to discuss your international payments please feel free to contact our Currency Dealing Desk on 011 888 0125. At fx paymaster, we have a number of experienced market traders on hand who can help you evaluate your currency exposure.