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Africa, Forex

Weak growth outlook keeps South African rand on back foot

JOHANNESBURG (Reuters) – South Africa’s rand dipped early on Tuesday, as a weak economic outlook dented appetite for local assets.

At 0630 GMT, the rand traded at 14.5400 versus the dollar, roughly 0.4% below its previous close.

Africa’s most industrialised economy is growing at a snail’s pace, with power supply interruptions from struggling state utility Eskom contributing to low business confidence.

The International Monetary Fund on Monday cut its South African growth forecasts to 0.8% this year and 1.0% in 2021, following recent downward revisions to the South African Reserve Bank’s forecasts.

President Cyril Ramaphosa has found it hard to push through much-needed reforms and rein in rapidly rising debt levels, putting the country’s last investment-grade credit rating from Moody’s at risk.

Government bonds were a touch weaker in early deals, with the yield on the benchmark 2026 bond up 0.5 basis points to 8.155%.

(Reporting by Alexander Winning; Editing by Shri Navaratnam)

South African Rand coins are seen in this photo illustration

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