South Africa: Rand slumps to new all-time low as coronavirus fears bite
The South African rand (ZAR) sank to a record low against the U.S. dollar in March, under pressure from the coronavirus (Covid-19) fallout. The currency ended 20 March at ZAR 15.5 per USD, marking a 13.5% depreciation over the same day in February. Furthermore, the currency was down 17.9% year-on-year and 20.2% year-to-date.
Rising concerns over the rapid spread of Covid-19, and the challenges it presents to South Africa’s fragile economy, pummeled the rand in the past few weeks. Concerns will be particularly acute regarding the country’s dire fiscal situation, which is only set to deteriorate.
Looking ahead, the rand is currently expected to recover some of its losses going ahead. However, the blow to economic activity from the pandemic and the sharp cut delivered by the SARB on 19 March will keep the currency under pressure.