South Africa’s battered rand slid to a record low on Wednesday afternoon in the face of mounting concerns over the future of the government of national unity (GNU) and the global shockwaves from US President Donald Trump’s tariff onslaught.
By 3.15pm, it had hit a record low of 19.9325 as reported by Reuters before shifting slightly lower to 19.85 at 5.15pm.
A breakthrough there could easily open the path to 20.0/dlr, which would be a massive and shocking psychological level.
The stakes are sky-high. The rand has been a sitting duck since the unleashing of Trump’s barrage a week ago compounded the domestic political uncertainty around the GNU.
What this means for you
- If the rand’s trading levels become elevated above the 20.0/dlr, inflation pressures will reignite from rising import costs. This will dash hopes of the Reserve Bank cutting rates again. A new hiking cycle could even be in the offing, which would heap further misery on your wallet and spending patterns.
Read more: Explainer – why the rand is a sitting and sinking duck
The rand simply cannot defy the laws of political and economic gravity. DM
This article has been updated to reflect rand movements throughout the day.
