South African Rand Plunges to New 2023 Low Versus the US Dollar – Recent data indicates that the South African rand has hit a new low for 2023 on March 7, with an exchange rate of 18.636 units for every U.S. dollar. Prior to this decline, the rand had reached its highest performance of the year on Jan. 12, 2023, with a rate of 16.721 per dollar.
The rand has experienced a significant depreciation of almost 10% since its peak on Jan. 12, 2023, causing it to be one of the poorest performing currencies in Africa this year. Sources attribute this decline to the ongoing electricity problems in South Africa, which have resulted in extended power outages lasting over 10 hours for many households and businesses.
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As a result of the disruptive power outages, President Cyril Ramaphosa of South Africa has appointed the nation’s inaugural electricity minister. In addition to tackling the debilitating blackouts, Ramaphosa has stated that the new minister, Kgosientsho Ramokgopa, is responsible for fostering cooperation between entities that are collaborating to identify a solution.
“The Minister will be expected to facilitate the coordination of the numerous departments and entities involved in the crisis response, work with the Eskom leadership to turn around the performance of existing power stations, and accelerate the procurement of new generation capacity,” president Ramaphosa reportedly said. Certain commentators in South Africa have suggested that the country’s inclusion on the Financial Action Task Force (FATF) greylist may have contributed to the rand’s recent underperformance against major international currencies.
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