The South African rand experienced a decline on Tuesday, November 19th, as investors sought refuge in safer assets.
This risk-off sentiment was triggered by Russian President Vladimir Putin’s updated nuclear doctrine, which heightened geopolitical tensions.
The rand weakened by 0.85% against the U.S. dollar, trading at 18.0950. Earlier in the day, the currency had fallen by over 1%.
Investors are also anticipating a potential interest rate cut by the South African Reserve Bank on Thursday.
This expectation could further weaken the rand, as lower interest rates typically reduce a currency’s attractiveness.
South African markets are closely watching the upcoming release of October’s inflation data on Wednesday and the central bank’s monetary policy decision on Thursday.
Economists predict a 25-basis-point rate cut, similar to the reduction implemented in September.
Despite the rand’s weakness, the Johannesburg Stock Exchange’s Top-40 index closed slightly higher, up 0.1%.
South Africa’s benchmark 2030 government bond also strengthened, with its yield decreasing by 1.3 basis points to 9.11%.