South Africa’s currency has hit a new low against the US dollar, continuing its downward spiral.
According to Reuters, late Sunday night – as Asian markets opened – the rand tanked to as low as R17.99 to the US dollar before pulling back to R17.25.
In trade on Monday morning, the rand was trading at R16.72 to the dollar – a new record low, since hitting its weakest point on Friday.
According to reports, the reason behind the latest dip is Japanese sellers – who are selling rand for dollars.
Analysts warned that the rand is currently at the mercy of external factors – most notably, trading circumstances in Asian markets – and that there may be worse to come.
Economist Mike Schussler from Economists.co.za sketched a grim scenario for the South African economy should the rand lose 20% of its value against the greenback in 2016.
Last year the rand gave up 25.9% of its value.
“If the rand should fall just another 20% over the next year… by the beginning of 2017 a dollar would cost R20,” he said.