Rand drops as power cuts, wage talks weigh

The rand weakened in early trade on Tuesday, as local issues such as power cuts and deadlocked wage talks weighed on sentiment.

At 09:22 the rand traded at R18.47 against the US dollar, 0.46% weaker than its previous close.

“The rand started the new week off by reversing all of Friday’s gains, and is once again poised to test the R18.50/$ mark in the days ahead,” ETM Analytics said in a research note, adding the rand on Monday recorded its biggest one-day decline since June.

Analysts flagged power outages that have become the norm. They added public sector wage negotiations and political contestation in the lead-up to the African National Congress (ANC) December leadership conference among rising risks.

The government’s benchmark 2030 bond was little changed in early deals, with the yield up 0.5 basis point to 11.045%.