Why the rand is going down, down, down…
It makes us the worst performing, except for the Turkish lira… the rand is now back to where it was before Ramaphosa was elected as ANC president…John Cairns, Rand Merchant Bank
It [Turkish economy] is in the process of collapse… Not only do we [South Africa] have a scratchy throat, we’ve been pushed into the cold… it has a worrying feel… If Turkey blows out, we haven’t seen the worse of the rand yet…Dr Adrian Saville, Cannon Asset Managers
The South African rand fell to its lowest level against the US dollar in two years on Monday.
At one point in the day, it was down more than 10% to a session low of R15.70, the rand’s weakest level since June 2016.
By 3:27 pm the currency recouped some of its losses, trading at R14.29.
The implosion of the Turkish lira and its spread to other emerging markets, and issues around land expropriation, failing state-owned enterprises and the South African economy teetering on the brink of a recession are amongst factors causing the severe weakness in the rand.
Whitfield also spoke to Rand Merchant Bank Strategist John Cairns.
Listen to the interviews in the audio below (and/or scroll down for more quotes from it).
Huge volatility, huge risks in the market… The key word is ‘contagion’… that’s what’s been happening… One domino after another… tightening liquidity because of the Fed…John Cairns, Rand Merchant Bank
I think this is just the start of it… the contagion from here has the capacity to spread quickly and rather fiercely.Dr Adrian Saville, Cannon Asset Managers
Turkish [foreign] borrowing sits at about half the economy… they’re sitting with an extraordinary problem…Dr Adrian Saville, Cannon Asset Managers
A strongman and a weak state… South Africa has seen this movie…Dr Adrian Saville, Cannon Asset Managers
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