On Tuesday 12 January, the rand has plummeted to a new record low of R17.99 to the US dollar after it closed off the markets on Monday at R16.72. The rand has not measured so well against international markets outside of the continent leaving at mercy of external factors such factors include the Asian markets.
The 9.9 percent drop in the second biggest economy in Africa is worst that the country has suffered in years since 2008. Economists have predicted a recession that could likely hit South Africa should things continue in this direction.
The rise in inflation risks is stemming as the Rand may force the central bank to take more aggressive measures to tighten policies at a time when the economy is barely growing. Worsening debt levels and the threat of credit-rating downgrades mean Finance Minister Pravin Gordhan has limited room to veer from his budget targets by boosting spending.
Commodity prices continue to be fragile however the gold sector seems to be surprisingly performing better than other precious metals. Most bullion producers have stocked up and seem fearless of talks that have turned into whispers of the possible looming strike in the gold sector.
Although the share price had dropped, the weaker rand is a sigh of relief for the main giant gold companies in South Africa.