“Since the start of the year, the rand has been one of the worst performers in EM,” said Daria Parkhomenko, an FX strategist at RBC Capital Markets in a note to clients. “We think that a key driver of this has been the rand carrying a risk premium for the worsening power situation.”
Parkhomenko said market confidence was low as President Cyril Ramaphosa’s response to the ongoing crisis has been slow, while some pledges to address the situation have not been met sufficiently. Turning the tide with investors would boost the currency, she said. “By our estimates, the pair would have space to sell off by almost 5%, with all else equal,” she said. “That would equate to ~16.90/95 from current spot levels of ~17.80.”
Credit default swaps for Eskom are trading at the cheapest in about eight months. That’s in anticipation of South Africa taking over as much as two-thirds of Eskom’s debt later this year, a deal that may be announced in the annual budget on February 22.
_Business Our peers don't have an incompetent ANC govetnment
_Business ANC, we thank you once again. Destroying the country piece by piece. Incompetence, corruption, and just plain ass wipes from CR down.
_Business I wonder why south Africa can't peg its currency in gold just like Zimbabwe did, south Africa is a world producer of gold. But ANC also.
_Business I wonder why? Eskom_SA