Russian Invasion of Ukraine Results in Oil Price Surge, Rand Drops 30c to Dollar, Foreign Investment Follows
- Brent Crude Oil prices have soared to levels last seen in September 2014 after Russia invaded Ukraine earlier today
- The rise in Brent Crude Oil prices caused the rand to weaken by 30c to the dollar after it increased the previous day
- Many foreign investors are using this opportunity to get rid of assets they have been meaning to sell
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JOHANNESBURG - After Russia invaded Ukraine early this morning (24 February), the rand began to fall as tensions and fears around the conflict increased.
Yesterday's Budget Speech had strengthened the rand as economists felt hopeful about Government's plans to secure South Africa's financial future. However, the announcement of Russia's invasion resulted in the rand weakening by 30c against the dollar.
According to BusinessTech, this is the first time since September 2014 that Brent Crude Oil is trading at over $100 per barrel. The rand/US dollar exchange rate is R15.27, and it is R17.17 to the euro.
Source: Getty Images
The effects of the oil price surge
Many investors have used the increase in Brent Crude Oil and the Russia-Ukraine conflict to get rid of assets that are not performing well, IOL reports. BarrenJoey Capital's head of cash equities, George Kanaan, said that many of the investors who are selling have been meaning to do so for some time.
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“With so many exchange-traded funds and automation, they flick the switch when there is uncertainty like this and buyers go on strike. That is why we are seeing the market gap like it is," Kanaan said.
Statistics South Africa is expected to release a report soon indicating South Africa's inflation rate for the 2022/23 financial year and predicting the country's upcoming debt.
Reactions behind the oil price surge following the Russia-Ukraine conflict
@Dayungone remarked:
"Petrol is gonna have us in a chokehold."
@rinmor said:
"At least we have oil reserves."
@ThereseMeyer9 shared:
"And now we rely on imports - we need to brace ourselves!"
@sep_rich believes:
"Russia will probably back down as time goes on. Severe sanctions looming."
Russia attacks Ukraine: Gun stores almost out of stock, SA expresses concern
In earlier news about the Russia-Ukraine conflict, Briefly News reported that Russia launched an attack on Ukraine by targeting several cities and ports with rockets and moving troops in. This is intended to be a full-scale attack.
Yesterday (23 February), Ukraine's parliament passed a law making it legal for civilians to carry weapons. As a result, gun stores in the country are nearly sold out of guns as thousands of Ukrainians wish to arm themself against potential attacks in the future.
The law came hand-in-hand with the declaration of a state of emergency in Ukraine. Currently, nearly 400 000 Ukrainians are trained in combat and have the necessary experience.
Source: Briefly News
