The South African rand has hit yet another all time low after dropping sharply as market turmoil in the volatile Asian trade deterred risk taking.
As of early morning trade the rand was at 16.78 against the US dollar, a drop of 2.85 per cent.
The currency has been hitting record lows this year posing a threat to investors.
Foreign investors don't like it at all, because it destroys the confidence we built up in the financial system, in the banking sector, in South Africa as an investor destination
There are concerns about sluggish growth in the developed nation.
“Foreign investors don’t like it at all, because it destroys the confidence we built up in the financial system, in the banking sector, in South Africa as an investor destination,” Ian Cruickshanks, chief economist at South African Institute of Race Relations said last month.
However, according to South Africa’s president Jacob Zuma, the markets are over reacting because he has changed finance ministers twice in December.
Since the beginning of the year, the Rand has been one of the worst affected currencies amid bearish markets.
“I think the rand is in a long term depreciating trend. It never goes in a one straight line worsening all the time. What we see is 3 steps back, 2 steps forward. And we are likely to see something like that but there’s no doubt: we are not a competitive global manufacturer or miner anymore so we are going to struggle with the fact that the rand will continue to depreciate in time, hopefully at a lesser rate,” Cruickshanks explained.
The local bourse has also not been spared.