POWER CUTS HIT THE RAND

THE RAND weakened yesterday after power utility Eskom said it would carry out more power cuts this week as it struggles with capacity shortages, weighing on investor sentiment.

At 5pm, the rand bid at R14.4354 to the dollar, about 0.4 percent weaker than its New York close on Friday.

Eskom said it would continue to implement rolling blackouts yesterday and today with 4 000 megawatts to be cut from the grid on a rotational basis.

“Eskom’s ongoing and extended load-shedding schedule will likely continue to weigh on possible prospects of an economic recovery,” Nedbank analysts said in a note.

Analysts 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. The economy grew by just 0.8 percent last year, insufficient to meaningfully reduce poverty or the high unemployment rate of 27 percent.

Currency traders were now looking for further direction from February consumer price inflation data tomorrow and the US Federal Reserve’s interest rate decision due later this week.

In fixed income, the yield on the benchmark government bond maturing in 2026 rose 2.5 basis points to 8.695 percent.

On the bourse, the Top40 index rose 1.42 percent at 50 388.59 points. The broader all share index rose 1.3 percent to 56 769.86 points. I Reuters