As South Africa’s public utility Eskom continues its load shedding and further putting a strain on the country’s economy, the rand is trading at its lowest level since March, leading to further concerns of an impending interest rate hike. On Wednesday, the South African rand traded at 15.03 to the dollar, nearly 3% weaker than Tuesday’s closing rate. Similarly, the currency also fell against the euro and pound, trading at 16.29 and 19.57 respectively.
On Tuesday, Eskom announced that the Stage 4 load shedding being currently experienced will last until Friday, as electricity generation units have failed in recent days. More than 20,000 megawatts of South Africa’s energy remain unavailable due to maintenance and unplanned breakdowns. In the same vein, floods in the KwaZulu-Natal region of the country have wreaked havoc on everyday life as well as businesses. More than 400 people have died and the floods have damaged clothing retailer Pepkor, paper company Sappi and forced Toyota to suspend production at its Durban plant.
South Africa’s latest inflation numbers were also announced on Wednesday morning, up to 5.9% from 5.7% in March but stopping just short of 6.0% economists had predicted. However, inflation has now stayed higher than 4.5% for eleven consecutive months.