The rand declined for a second day yesterday, touching a two-and-a-half week low against the dollar, as protests in Bahrain added to Middle East tensions, prompting investors to shun high-yielding assets.
The rand depreciated as much as 0.8 percent to R7.0415 to the dollar in the session, the weakest level since February 25. By 5pm, it was bid at R6.9801, almost 1c weaker than its level on Tuesday.
Bahrain suspended trade on a state of emergency as Saudi Arabia sent troops into the neighbouring kingdom to help quell protests. In Libya, government troops moved against rebels in the east. In Japan, the nuclear crisis deepened.
“Any worsening in the situation” in the Middle East and north Africa, “combined with the financial aftershocks of the Tohoku earthquake, is likely to lead to chaos in markets,” Prieur du Plessis, the chairman of Plexus Asset Management in Johannesburg, said yesterday. – Bloomberg