Economists: Phala Phala scandal not the only reason for weaker rand

Economists said the weakening of the rand could not only be attributed to President Cyril Rampahosa’s Phala Phala scandal, although it was a contributing factor.

The rand weakened in the last 24 hours, with the currency trading close to R18 against the dollar mark.

The rand was trading at R16.99 to the dollar on Wednesday, with it trading at R17.70 on Thursday.

Economist, Dale Mckinley said that factors that were strengthening the rand had disappeared.

“It will probably continue this way for the next while regardless of what happens to President Ramaphosa, precisely because there are all sorts of other indicators such as interest rates, such as inflation, such as what’s going on in the Chinese economy.”

Economist, Bonke Dumisa said if the rand continued to decline in the coming days, then it could be linked to the Phala Phala scandal.

“So, if there is a continued negative trajectory for the rand between now, maybe, and tomorrow or Monday, then I can literally say it, without any discomfort that, yes, it has played a role.”

-EWN

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