South African rand opens weaker as growth fears hurt riskier assets

The South African rand opened weaker on Monday, mirroring moves elsewhere in emerging markets as fears over global economic growth dented appetite for riskier assets.

At 0600 GMT, the rand traded at 18.9100 versus the U.S. dollar, roughly 0.6% weaker than its close on Friday.

The rand fell more than 4% versus the dollar last week, hurt by a surprise central bank interest rate cut and predictions that the domestic economy would suffer a severe contraction because of the COVID-19 pandemic.

On Monday, President Cyril Ramaphosa’s cabinet is due to meet to discuss new measures to contain the economic impact of COVID-19, including whether to close ailing state airline South African Airways, which has been a major drain on state resources.

South Africa’s public finances were in bad shape before it detected its first case of the new coronavirus in March, constraining its ability to provide stimulus.

The country had recorded 3,158 coronavirus cases and 54 deaths as of Sunday.

South African government bonds were mixed in early trade, with the yield on the 2030 instrument down 6 basis points to 10.29% after rising earlier.