The South African rand slumped on Monday as investor concerns mounted over a power crisis that prompted President Cyril Ramaphosa to cancel a trip to the World Economic Forum in Davos.
South African bank notes featuring an image of former South African President Nelson Mandela are displayed at an office in Johannesburg, File. REUTERS/Siphiwe Sibeko
The South African rand traded at 17.0775 against the dollar at 1230 GMT, about 1.4% weaker than its previous close. It earlier in the day hit its weakest since Dec. 13. Recent strengthening in the rand had been a "dollar play", he said, adding, "we haven't broken any key technical levels as yet. I think the first big level that I would worry about that would signal a reversal for me, would be closer to the 17.20 mark.", as more of its generating units broke down. That requires up to 6,000 megawatts to be shed from the national grid, versus Eskom's 46,000 MW nominal capacity.
"The rest of the emerging market space has also been under pressure but the rand is leading the way as load-shedding and the cost to the economy is worrying investors," he said, using a term for power outages.
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