Currency breaches R19 to dollar, spotlight on Ramaphosa address

South Africa’s rand breached the psychological R19 to the US dollar level for the third time in April on Tuesday, touching a low of R19.11 in morning trade.

The rand was down by around 30 cents or just more than 1.4% by 11.25am. However, the spotlight will be on President Cyril Ramaphosa’s latest address to the nation, set for Tuesday night, wherein he is expected to announce additional Covid-19 economic and social relief measures.

Read: Fitch downgrade sees rand slide to R19 against the dollar

Ordinary South Africans, business and labour will be keen to hear what Ramaphosa has to say, as government faces increasing pressure to announce some form of broader economic stimulus and relief package in response to the Covid-19 pandemic and 35-day lockdown.

It comes amid a worsening Covid-19 economic fallout as thousands of businesses have been forced to close countrywide and massive job losses are expected. Just last week, the South African Reserve Bank forecast that GDP will shrink by as much as 6.1% for 2020.

Read: Sarb cuts interest rates by another 100 basis points

Meanwhile, the continued volatility of the rand following the global impact of Covid-19, in addition to the double-whammy of credit rating downgrades by Moody’s and Fitch within the last month, sees the rand retaining its unenviable status as the worst-performing emerging market currency.

Most emerging market currencies came under further pressure from a surging US dollar on Tuesday.

Listen/Read: Busa CEO Cas Coovadia on rumours of an impending multi-billion stimulus package.

Source: moneyweb.co.za