Reuters
South Africa’s rand inched lower early Thursday, extending the previous session’s sharp drop as the latest nationwide power cuts by embattled state utility Eskom renewed fears of credit ratings downgrades.
The rand was trading at 14.9520 to the dollar in the morning session, after sliding as much as 1% to a one-week low 15.0550 in the previous session.
Eskom said break-downs at some of its coal-burning plants hit its power generation ability, forcing it to shave supply to the national grid.
Debilitating power cuts in February and March pushed first-quarter economic growth into contraction and raised the likelihood of South Africa losing an investment-grade rating.
Moody’s is the last of the big three credit rating agencies to have an investment grade rating on South Africa and is due to deliver its latest credit review on 1 November, two days after Finance Minister Tito Mboweni delivers his mid-term budget speech.
