Rand fluctuates amid escalating India-Pakistan tensions
On Wednesday morning, amid escalating tensions between India and Pakistan, India launched military strikes on targets in Pakistan, meeting a strong response from the latter.
Image: Ai
The local currency has lost some ground as India and Pakistan fire targets at each other, dropping some 20c between its New York close and mid-morning on Wednesday.
On Wednesday morning, amid escalating tensions between India and Pakistan, India launched military strikes on targets in Pakistan, meeting a strong response from the latter.
Andre Cilliers, currency strategist at TreasuryONE, said the rand, which had traded below the R18.15 level in New York on Tuesday night, was at R18.34 mid-morning on Wednesday as risk sentiment slips on the back of the Indian attack on Pakistan.
Cilliers added that long rand positions have also been trimmed ahead of the Federal Reserve's interest rates decision, which will be out overnight. Anchor Capital's chief investment officer, Nolan Wapenaar, said the company was watching South Africa's terms of trade and a returning risk appetite from global investors.
China, South Africa's largest trading partner, officially said that it 'finds India's military operation early this morning regrettable'.
China and India and both major trading partners with South Africa, with all three member countries of the original Brazil, India, Russia, China and South Africa trading bloc, which was expanded last year to include other emerging markets.
South Africa's largest trading partner is China, with South Africa's total bilateral trade with China soaring from $1.34 billion in 2000 to $34.18 billion in 2023, according to the Institute of Security Studies.
Meanwhile, The Observatory of World Economy stated that, in February this year, that trade between India and South Africa was worth close on $1bn.
The firefight between India and Pakistan did not, however, drop the value of the rand to the one-month low seen on April 8, when it went about the key R19 level on the back of US President Donal Trump's tariff announcements and subsequent 90-day pause on their implementation.
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