South Africa’s rand fell on Tuesday as US military strikes on Iran dampened hopes for a peace deal. The rand traded at 16.3875 against the dollar, down about 0.6% from its previous close.
The fragile truce between the United States and Iran was jeopardised after the US conducted what it described as defensive strikes, which Iran condemned as a “gross violation” of the seven-week ceasefire.
Despite this, both sides indicated that progress was being made toward an agreement that would end the conflict and allow shipping to resume through the blockaded Strait of Hormuz.
On the domestic front, South Africa’s composite leading business cycle indicator, which measures economic momentum, rose by 2.4% in March.
“The continued increase in the leading indicator suggests that, before recent developments, the domestic economy was on track for another year of improved economic growth,” said ETM Analytics.
Market attention is currently focused on the South African Reserve Bank’s Monetary Policy Committee meeting scheduled for Thursday, where economists polled by Reuters anticipate a 25-basis-point rate hike.
On the Johannesburg Stock Exchange, the Top-40 index closed down 0.2%. Additionally, South Africa’s benchmark 2035 government bond weakened, with the yield rising by 2.5 basis points to 8.54%.
On Wednesday, 27 May, the rand was trading at R16.35 to the dollar, R22.00 to the pound, and R19.04 to the euro. Gold is trading lower at $4,501.90 an ounce, while oil prices were at $97.95 a barrel.
5 important things happening in South Africa today
Good news for driver’s licenses: The process to extend the validity period of South African driving licence cards from five to eight years has taken another step forward. The Department of Transport noted that it plans to send the policy document to Cabinet for approval by the end of the current financial year. [TopAuto]
South Africans could stop using the rand: Efficient Group director and chief economist Dawie Roodt said that unless South Africa gets rid of exchange controls, people will stop using the rand in favour of cryptocurrencies and stablecoins. [MyBroadband]
Eskom’s deal with Johannesburg: According to Minister Kgosientsho Ramokgopa, the City of Joburg will ring-fence revenue from electricity purchases starting 1 July to address its R5.3 billion debt to Eskom. [Business Day]
Treasury terminating debt relief for failing municipalities: The National Treasury says it is terminating the debt-relief programmes for municipalities that have consistently failed to meet their obligations, and the next move is for them to deal with Eskom. [BusinessTech]
Probe launched into dodgy R1.6 billion textbook tender: Basic Education Minister Siviwe Gwarube has decided to initiate a forensic investigation into her department’s R1.6 billion tender for supplying textbooks during the foundational phases of basic education. [TimesLive]
