JOHANNESBURG (Reuters) – South Africa’s rand weakened further on Friday after losing ground against a surging U.S. dollar all week due to indications that the Federal Reserve might keep rates higher for longer.
At 1512 GMT the rand traded at 19.0550 to the dollar, about 0.6% weaker than its previous close. It started the week at around 18.6800 to the dollar.
The dollar was last up about 0.12% against a basket of global currencies and on track for a second weekly gain in a row.
Signs of resilience in the U.S. economy and caution from central bankers have caused traders to dial down expectations of swift falls in interest rates, strengthening the greenback.
Fitch ratings agency on Friday affirmed South Africa’s rating at “BB-“, with its outlook stable, saying it estimated that power cuts would reduce in intensity in 2024 and 2025 compared with 2023, but not disappear.
In a response, South Africa’s treasury said it planned to focus on boosting economic growth over the medium-term by improving electricity provision and infrastructure.
South Africa’s chronic power cuts were at their worst ever in 2023, lasting up to 10 hours a day for many businesses and households.
On the stock market, the Top-40 index closed about 0.5% higher. South Africa’s benchmark 2030 government bond was slightly stronger, with the yield down 3 basis points at 9.765%.
(Reporting by Nellie Peyton; Editing by David Goodman and Alison Williams)