The rand traded at its weakest point against the dollar in about a month on Tuesday morning, decoupling from the global risk-on scenario that has played for the better part of January.
The dollar has also been under pressure relative to the basket of currencies, including the pound and the euro. The dollar weakness is also reflected in relatively higher commodity prices such gold, which has gained 5% since the start of 2023. The rand’s underperformance, therefore, suggests that local factors may be at play. The unreliable and erratic power supply from power utility Eskom is singled out as one of the biggest threats to growth prospects.
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