South Africa rand hits all-time low against the dollar

africaSouth Africa’s currency has fallen to an all-time low against the US dollar.

It briefly hit a rate of 14 to the dollar amid concerns about the strength of the Chinese economy, reports the Reuters news agency.

Economies that rely on the sale of commodities – such as South Africa’s – have been hit by the slowdown in growth in China, a major source of demand.

The problem was compounded when China unexpectedly devalued its currency earlier this month.

The rand is particularly vulnerable because it is one of the globe’s most highly traded emerging market currencies, South African economist Martyn Davies told the BBC.

He added that South Africa’s central bank will find it hard to defend the currency against a slide in value, instead the government needs to address some of the fundamental economic issues such as the problems in the power sector.
Impact felt elsewhere

Several other African currencies have been under pressure in recent weeks over fears of a Chinese economic slowdown.

With oil currently hovering around $40 (£25) a barrel, there are concerns about the prospects for oil-based economies, especially Nigeria and Angola.

The relative strength of the US dollar has also had an effect on – among others – the Zambian kwacha and the Ugandan shilling, which have both hit record lows in the past week.

Souece: BBC