South Africa’s rand weakened on Monday due to higher oil prices, which were driven by stalled US–Iran negotiations.
This situation raised concerns that inflationary pressures might keep interest rates elevated for an extended period. The rand was trading at 16.4626 against the dollar, down approximately 0.6% from its previous close.
Analysts noted that the rand has lost a small amount of ground today, with Trump’s latest comments not impacting it significantly. However, they still expect an upward move due to rising oil prices.
US President Donald Trump rejected Iran’s response to a US proposal for peace talks on Sunday, dampening hopes for a swift resolution to the 10-week-old conflict.
This conflict has inflicted widespread damage in Iran and Lebanon, disrupted maritime traffic in the Strait of Hormuz, and contributed to the increase in global energy prices.
Oil prices surged above $100 per barrel on Monday as the Strait of Hormuz remained largely closed, tightening global energy supplies.
The US dollar also strengthened against a basket of currencies as investors sought refuge in safer assets.
This week, investors focused on South Africa will be assessing unemployment figures, manufacturing production data, and mining output, which will provide insights into the health of Africa’s most industrialised economy.
Additionally, South Africa’s benchmark 2035 government bond weakened in early trading, with yields rising by 6.5 basis points to reach 8.695%.
On Tuesday, 12 May, the rand was trading at R16.48 to the dollar, R22.39 to the pound, and R19.38 to the euro. Gold is trading lower at $4,716.97 an ounce, while oil prices were at $104.90 a barrel.
5 important things happening in South Africa today
Shoprite CEO joins the chorus of warnings: Shoprite CEO Pieter Engelbrecht has warned that South Africa’s gambling problem is unsustainable, with many people sacrificing essential needs such as food. He joins the chorus of similar warnings from other CEOs, including Absa’s CEO Kenny Fihla, who said that gambling trends are a “huge predictor” of loan delinquency. [BizNews]
DStv under threat: The Competition Commission is considering full prosecution of MultiChoice for allegedly violating the Competition Act, which could result in a penalty of up to R4 billion. MultiChoice, which owns DStv, has experienced operating losses and is facing stiff competition from streaming platforms, making such a fine a significant threat to its financial stability. [Daily Investor]
Ramaphosa says he will not resign: President Cyril Ramaphosa announced that he has no intention of resigning from office and intends to challenge the report with findings against him. [BusinessTech]
Union warns of jobs bloodbath: The United National Transport Union (Untu) has criticised Prasa for planning to retrench 603 employees without consultation, urging members not to sign related documents. Untu spokesperson Atenkosi Plaatjie called the consultation process flawed, as Prasa withheld critical information needed to avoid a jobs bloodbath. [Business Day]
Banks are pimping out Smart IDs: In under two months, the digital partnership programme between Home Affairs and three major banks processed over 100,000 smart ID card applications, according to feedback shared just 59 days after the launch. [MyBroadband]
