The Pound Sterling to South African Rand exchange rate firmed to a session high of 18.2660 on Tuesday as the UK markets re-opened following the bank holiday weekend and as domestic data out of Africa’s most developed economy weighed upon the Rand. Ongoing worries over electricity supplies, civil unrest and a weakening economy also continued to put pressure on the South African Rand.
The main cause for the decline in manufacturing activity was blamed on the amount of power cuts being implemented by utility company Eskom. With South Africa’s power grid under immense strain, the power company has been forced to introduce load shedding and rolling black outs. With winter coming in the southern hemisphere, demand for electricity is set to increase.
The South African Rand is expected to remain under pressure against its major peers as concerns over anticipated strikes in the gold mining and public sectors look set to increase.