The South African rand dipped sharply on Tuesday, battered by global risk aversion following Russia’s updated nuclear policy announcement.
By 1508 GMT, the rand weakened 0.85% against the U.S. dollar, trading at 18.0950. Earlier, it had slid over 1%, reflecting heightened market caution.
President Vladimir Putin’s revised nuclear doctrine aims to underscore Russia’s retaliatory capabilities, unnerving investors already skittish over U.S.-Russia tensions. The move drove a flight to safe-haven assets like the dollar.
Market sentiment was further tempered by expectations of a rate cut from the South African Reserve Bank on Thursday. A Reuters poll forecasts a 25-basis-point reduction, following a similar move in September.
Attention now shifts to South Africa’s October inflation figures, due Wednesday, which will offer key insights into the Reserve Bank’s policy stance.
Meanwhile, the Johannesburg Stock Exchange’s Top-40 index managed a modest gain, closing 0.1% higher, defying the broader risk-off sentiment.
South Africa’s benchmark 2030 government bond also showed resilience, with yields easing by 1.3 basis points to 9.11%.
Global geopolitical tension and local economic decisions continue to shape the volatile landscape for South Africa’s currency and markets.
