Rand weakens along with SA’s growth prospects

The rand was weaker on Friday morning, as load-shedding and weak domestic growth prospects continued to put pressure on the local currency.

On Thursday, disappointing local manufacturing data for November showed manufacturing output fell more than expected by 3.6% from a contraction of 0.8% in the previous month. 

State utility Eskom’s power cuts are putting significant pressure on SA’s mining and manufacturing sectors, which also struggled with unreliable electricity supply in the first quarter of 2019.

On Wednesday, the World Bank cut its economic growth forecast for SA to below 1% for 2020 on concern over the continuing power cuts by Eskom. The World Bank cited unreliable electricity supply and infrastructure constraints as inhibiting domestic growth, and also highlighted persisting policy uncertainty.