JOHANNESBURG (Reuters) -The South African rand strengthened on Monday against a weaker U.S. dollar, after hitting a three-month low earlier in the day amid concerns about persistent power cuts.
At 1803 GMT, the rand traded at 17.8400 to the dollar, about 0.3% stronger than its previous close.
Earlier in the day, it broke above 18 to the dollar for the first time since November 2022.
South Africa is facing an energy crisis that President Cyril Ramaphosa has called an “existential threat” to its economy. Last week he declared a national “state of disaster” over the power shortages, giving the government additional powers including permitting emergency procurement procedures.
On Friday ratings agency Moody’s said in an issuer comment on South Africa: “the (power) blackouts’ effect on businesses, consumer sentiment and investment will weaken the country’s already subdued economic growth prospects and threaten social and political stability”.
The dollar was down about 0.2% against a basket of global currencies on Monday, with market attention pinned on Tuesday’s U.S. consumer price report and its implications for the Fed’s interest rate trajectory.
Local investors will be looking at South Africa’s latest consumer price report and retail sales figures on Wednesday for clues on the health of the economy.
The Johannesburg Stock Exchange’s All-share index was up 0.99%.
Shares of Attacq jumped 15.4%, their biggest one-day jump on record, after the South African commercial property group said the Government Employees Pension Fund (GEPF) is planning to buy a 30% stake in its Waterfall investment firm for 2.8 billion rand ($157 million).
The government’s benchmark 2030 bond was slightly stronger, with the yield down 1.5 basis points to 9.850%.
($1 = 17.8461 rand)
(Reporting by Alexander Winning and Nellie Peyton; Additional reporting by Nqobile Dludla; Editing by Sherry Jacob-Phillips, Ed Osmond and Andrea Ricci)
