The Recession stricken RAND (R) has extended its losses on Wednesday due amid fears of possible downgrade by the global rating agency Moodys..
The South African rand traded at 12.8700 per dollar, 0.4 percent weaker than its close of 12.8225 overnight as fears of possible downgrade by Moody’s looms.
South Africa has entered into a recession for the first time in eight years as manufacturing and trade, tourism sectors saw sharp downturns, with growth contracting 0.7 percent in Q1 2017 after shrinking 0.3 percent in Q4 2016.
The country’s Reserve Bank announced the $42 billion rise in the Net foreign reserves on Tuesday.
Government bonds were weaker, with the yield on benchmark paper due in 2026 up 4 basis points to 8.525 percent.
Stocks were set to open flat at 0700 GMT, with the JSE securities exchange’s Top-40 futures index down 0.1 percent.
Apparently the Investors have lost confidence in the South African economy due political crisis in the ruling party African National Congress (ANC) and the extend of crime in the government.
Investors are worried that news of the first recession in eight years could prompt further credit rating downgrades.