From the news desk

The rand takes an all time hit since the Lady R incident

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By Kouthar Sambo

The Lady R case has impacted the country’s economy since the announcement by US Ambassador to South Africa Rueben Brigety claimed in May that South Africa supplied Russia with arms in December through the Lady R cargo vessel.

The incident resulted in the rand taking a significant hit. While it may have recovered weeks later, recent reports indicated that the matter had not been entirely resolved since investors have raised their eyebrows at the declining rand.

Speaking on VOC’s Drive Time show earlier today, Head of Research and Portfolio Manager of the Camissa Islamic Funds and Economist Abdul Aziz Davids said the fluidity of the rand makes it vulnerable.

“One of the Achilles’ heel of our currency is that it is very liquid. We find that global investors can easily trade the rand, and because of this, it becomes a proxy for an emerging market,” explained Davids.

A contributing factor to the weakened rand, highlighted Davids, is that the dollar is simply stronger.

“Globally, we have seen the emerging market currencies under significant pressure, and part of it is the US narrative where they are talking about the interest rate being higher for longer. We find that investors are losing their appetite for the emerging market,” reiterated Davids.

Photo: Pixabay

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