Katlego Sekhu
On Business Update, Gugulethu Mfuphi joined Sizwe Dhlomo to analyse the rand’s sharp decline, now teetering near R20 to the US dollar.
Mfuphi attributed the currency’s weakness to a dual effect:
“The US dollar itself is facing significant depreciation, alongside declining Treasury yields and economic performance. While this typically signals reduced investor confidence in the dollar—which should benefit emerging markets like ours—the rand remains vulnerable as a proxy for global emerging-market sentiment.”
She emphasised that local factors are exacerbating the crisis:
“The GNU negotiations have created uncertainty. Delays in finalising the budget, implementing fiscal policy, and advancing structural reforms—coupled with South Africa’s weakening growth outlook—have left investors questioning whether the country can stabilise its own economy, let alone navigate global volatility.
”With the exchange rate touching R19.70 this week (a level last seen in June 2023), Mfuphi warned of tangible consequences: “A sustained slump will drive up import costs, particularly for goods from key markets like China.”
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