- The South African Rand is plummeting in value on Monday, one of the steepest declines in value, a 40-year low
- The currency is currently down 8% against the US dollar
- Briefly.co.za explores what prompted the nosedive
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South Africa's economic woes have been compounded by the Rand doing a nose-dive on Monday.
The currency fell 8% against the US dollar, one of the steepest drops in history with the Rand performing poorly against numerous international markets, reports the South African.
This drop comes after a modest Budget Speech failed to ease concerns over the decline in the economy.
The coronavirus epidemic has also impacted the global market, restricting trade and travel in a number of countries.
Oil prices have been decreasing since January and recent times have seen the issue compounded. Russia and Saudi Arabia are battling over oil production and prices, resulting in a bidding competition that has rattled markets.
Rating agency Moody's dim predictions over the impact of load-shedding on the economy have also served as a source of concern, with the rating hovering near junk status.
READ ALSO: President Ramaphosa addresses South Africa over technical recession
All of these factors collectively saw the Rand plummeting to a 40-year-low against the US dollar, currently sitting at R16.75. The last time the currency was so weak against the dollar was back in 1980.
Briefly.co.za reported that President Cyril Ramaphosa had addressed the nation over the announcement of a technical recession.
Ramaphosa had chalked the lack of economic growth up to load-shedding, a struggling agricultural industry and consumer confidence falling.
Coincidentally, Eskom announced the return of load-shedding on Monday, implementing Stage 1 powercuts across South Africa.
This comes as the power utility attempts to undo years of mismanagement and neglect in the face of a growing debt burden.
Fin24 reports that Sasol has been hard-hit by recent developments, with share prices in the oil and chemicals company plunging by 45% in the first few minutes of trading.
This comes after Saudi Arabia slashed oil prices with the biggest margin seen in the past 20 years, according to Bloomberg News.
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