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Power Cuts Pound Rand


FILE: A portrait of the late Nelson Mandela is photographed on two hundred rand bills in Johannesburg Thursday, Dec. 10, 2015.
FILE: A portrait of the late Nelson Mandela is photographed on two hundred rand bills in Johannesburg Thursday, Dec. 10, 2015.

South Africa's rand weakened early on Monday, as power utility Eskom extended scheduled electricity cuts, which are a major brake on economic growth and source of investor concern.

Eskom said in a statement it would implement "Stage 3" and "Stage 4" power cuts until Tuesday.

Power cuts, of course, hit manufacturing and other business sectors, which, in turn, causes currency traders to send the value of South Africa's "rand" currency downward.

At 0700 GMT, the rand traded at 17.1500 against the dollar, 0.16% weaker than its previous close.

This week, investors will focus on an interest rate decision by the South African Reserve Bank (SARB).

Eleven of the 20 economists polled by Reuters predicted the South African Reserve Bank would raise rates by 50 basis points to 7.50% at its upcoming rate-setting announcement on Jan. 26.

Most economists saw no further rate hikes after this week, forecasting the end of a tightening cycle that began in November 2021.

The government's benchmark 2030 bond was almost unchanged in early deals, with the yield at 9.780%.

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