Rand roiled by rising South African growth fears

The rand weakened on Wednesday, with confidence hit by further signs of South Africa‘s economic fragility.

South Africa has imposed some of the toughest restrictions on the continent to try to contain the coronavirus outbreak, including deploying the army to support police during a 21-day lockdown that began on Friday.

The likely toll on an economy already in recession showed-up in preliminary tax numbers, with 2019/20 collection R160 billion below February’s Treasury estimates.

After its worst quarterly performance since at least the 2008 global financial crisis the rand was 0.53% weaker at R17.96 per dollar at 1500 GMT after earlier matching an all-time low of R18.08.

Sentiment was also hit by the Absa purchasing manager’s index showing a downturn in activity and news that state utility Eskom told independent wind farms it could buy less of their power in the coming days as electricity demand plummets during the lockdown also.

The Johannesburg Stock Exchange’s Top 40 index fell 2.08% to 39,892 points and the All-Share index weakened 2% to 43,592 points as world equity markets slumped on evidence that the coronavirus pandemic was sending the global economy into a deep recession.

Among the biggest fallers were gold mining shares, with Gold Fields and AngloGold Ashanti.