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The rand is paying the price for South Africa’s woes, with the 20 per dollar level now firmly in sight as investors fret about restrictive monetary policy adding to a deepening power crisis and political missteps to throttle the already ailing economy.
The currency plunged to a record 19.8468 per dollar on Thursday after the South African Reserve Bank raised its policy rate to a two-decade high. That capped six straight weeks of losses for the rand in the face of unprecedented electricity shortages and a diplomatic row with the US over South Africa’s ties with Russia. Options pricing shows an 80% chance that it will hit 20 within the next month.
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