Rand stutters as electricity crisis weighs
JOHANNESBURG, March 20 (Reuters) - South Africa's rand edged lower on Wednesday, lagging gains in its emerging market counterparts, as the prospect of rolling blackouts and bleak demand for local currency dented sentiment.
At 0630 GMT, the rand ZAR=D3 was 0.07 percent weaker at 14.5050 per dollar from a close of 14.4950 overnight in New York.
Caution prevailed among investors as South Africa's power utility Eskom said it would continue implementing power cuts on a rotational basis as it struggles with generating capacity shortages. say power cuts, which have happened in several rounds since June last year, are one of the reasons why business confidence has slumped in recent months. emerging market currencies advanced as investors expect the U.S. Federal Reserve to strike a dovish tone and maintain the interest rates at its policy meeting decision later in the day.
Those gains, however, were capped by renewed tension in U.S.-China trade negotiations overnight after reports that some U.S. officials were concerned China was pushing back against Washington's demands in trade talks. rand has stuttered all week and is unlikely to be buoyed by an expected tame inflation print due at 0800 GMT, with investors deterred by a deepening crisis at state firm Eskom, which said on Tuesday it will continue power cuts as it battles capacity shortages.
The situation worsened on Saturday after Eskom lost its electricity imports from the Cahora Bassa hydroelectric system in Mozambique, which contributes more than 1,000 MW to the South African grid, after a powerful cyclone. weakened, with the yield on the benchmark government paper due in 2026 ZAR186= adding 6.5 basis points to 8.825 percent.
Stocks were set to open lower at 0700 GMT, with the JSE securities exchange's Top-40 futures index ALSIc1 down 0.41 percent.
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