Rand back to R13/$ as ‘Ramaphoria’ wanes

The rand weakened to more than R13 to the dollar on Thursday night for the first time since Cyril Ramaphosa’s election as ANC president in December.

The South African currency managed to claw its way back just under R13 to the dollar on Friday morning, trading at R12.98 to the dollar, R15.32 to the euro and R17.42 to the pound at 7am.

It reached a low of R13.03 to the dollar on Thursday night.

Part of the rand’s slide could be attributed to emerging-market currency traders switching to the Turkish lira.

Reuters reported on Thursday the lira rebounded by 2% to 4.46 to the dollar after Turkey’s central bank surprised the market by raising interest rates by 125 basis points to 17.75%.

The lira had dropped about 15% in 2018 so far this year, sinking to a record low of 4.93 in May.

Other reasons for the rand’s slide could be next week’s US Federal Reserve Bank interest rate decision on June 13 and European Central Bank decision on June 14.

US President Donald Trump made numerous tweets indicating Friday’s G7 meeting in Canada will be acrimonious.

“Why isn’t the European Union and Canada informing the public that for years they have used massive Trade Tariffs and non-monetary Trade Barriers against the U.S. Totally unfair to our farmers, workers & companies. Take down your tariffs & barriers or we will more than match you!” was Trump’s most recent tweet posted at about 4am Johannesburg time.