The rand was weaker on Thursday at midday, reaching another record low against the dollar, as the Covid-19 pandemic continues to threaten the global economy and financial markets causing investor risk sentiment to remain fragile.
The local currency fell to R18.33/$, according to Infront data.
Investment banks and hedge funds are shying away from emerging-market assets as there is fear that those countries have not yet felt the full effect of the coronavirus, TreasuryOne senior currency dealer Andre Botha said in a note.
Health minister Zweli Mkhize told parliament on Wednesday evening that the outbreak might get significantly worse.
The dollar was also benefiting from investor interest in safe-haven assets, said Peregrine Treasury Solutions treasury partner Bianca Botes in a note.
“Having tested the level since Monday, this momentum to the downside finally pushed the rand well above the R18/$ mark. We continue to see exceptionally wide ranges, and the rand is expected to remain under pressure,” said Botes.
At 12.01pm, the rand had weakened 0.53% to R18.3177/$, 0.40% to R20.0236/€ and 1.13% to R22.8227/£. The euro had lost 0.10% to $1.0934.
Finance minister Tito Mboweni has met other African finance ministers via video conference to discuss the potential of approaching the International Monetary Fund and World Bank for funding, to assist Africa in fighting the coronavirus crisis.
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