South Africa’s Rand Falls Against Stronger U.S. Dollar

The rand sank in early trade on Monday as the US dollar climbed to a two-decade high amid mounting fears about global economic growth stalling and interest rates rising.

The rand was trading at R16.14 against the dollar at 0617 GMT, down 0.76 percent from its previous close.

Inflationary pressures, the Ukraine conflict, and tougher restrictions on Covid-19 in Beijing and Shanghai have left investors uneasy on several fronts, but they are convinced that US interest rates will rise – and the currency will follow.

A stronger dollar makes high-yielding but riskier assets like the rand less attractive to investors.

This week, the local attention will be on the March mining and manufacturing data, which will be released on Thursday and provide some insight into the status of the economy in the first quarter.

Government bonds fell in value alongside the currency, with the 30-year bond yield rising 5.5 basis points to 10.145 percent.