South Africa’s rand fell yesterday, tracking the euro lower after the European Central Bank pushed back its forecast for an interest rate hike and offered banks more cheap loans, while at home state power utility Eskom got smaller tariff hikes than sought.
Stocks weakened as market heavyweight Naspers came under pressure despite a jump in MTN’s shares, which led gainers across the bourse, after reporting a surge in annual profit.
At 1530 GMT, the rand was 1,44 percent weaker at 14.4750 per dollar, compared to a close of 14.2700 on Wednesday.
The European Central Bank changed tack on its tightening plan on Thursday, pushing out the timing of its first post-crisis rate hike until 2020 at the earliest and offering banks a new round of cheap loans to help revive the euro zone economy.
The rand has suffered since breaching the 14.00 level last month as nationwide blackouts affecting ailing electricity firm Eskom weighed on sentiment.
Energy regulator Nersa yesterday granted cash-strapped Eskom above-inflation power price hikes over the next three years, but the increases were far below what the utility had asked for.
“Although not as steep as anticipated, the increase will still put further pressure on the already constrained consumer, with job cuts a possibility as electricity intensive industries struggle to cope with elevated input costs,” Investec economist Lara Hodes said in a note.
The yield on the benchmark 10-year government issue dipped 0.5 basis points to 8,675 percent.