Rand weakens to 12-week low as investor sentiment on inflation turns gloomy

The rand, which as recently as February 24 was trading at its strongest level in more than 13 months, breached R15.50 for the first time in eight weeks on Monday as prospects of higher inflation and interest rates in major economies saw investors pull money from emerging markets.

SA’s currency slump to an intraday worst level of R15.57/$, taking its loss for 2021 to 5.15%, marks a huge turnaround. The currency was one of the main beneficiaries of a rally among risky assets from late 2020, boosted by Joe Biden’s victory in the US presidential election in November, which paved the way for a major stimulus package. That built on optimism of a return to normality for the global economy as nations started to roll out Covid-19 vaccines…