Rand weakens on risk aversion

The rand weakened against the dollar in early trade on Tuesday, still reeling from concerns about weakening global growth and data that showed China’s economy slowed sharply in 2018.

At 0720 GMT, the rand was 0.63% weaker at 13.92 versus the dollar, compared with a close of 13.83 in New York.

Government bonds were also weak, with the yield on the benchmark 2026 instrument up 1 basis point at 8.910%.

The dollar hovered near two-week highs on Tuesday as a slowdown in China’s economy to 28-year lows fanned fresh worries over global growth and prompted investors to move into safe-haven currencies.

The International Monetary Fund on Monday cut its world economic growth forecasts for 2019 and 2020, citing weakness in Europe and some emerging markets, and warned that failure to resolve the Sino-US trade dispute could further destabilise a slowing global economy.

Read: You call this a cut? IMF forecast isn’t too shabby

“Worldwide growth concerns have emerged as the number one factor market participants are presently focusing on, after the IMF cut its global growth forecasts for 2019 and 2020 on Monday,” Peregrine Treasury Solutions corporate treasury Manager, Bianca Botes said in a note.