(2 minutes read)
· Close on the heels of the energy crisis, which is eating into
the vitals of the economy, panic selling set in the stock market over
the impact of the new coronavirus
· The rand was down more than 3% to R16.21/ to the US dollar
after reaching R16.97 earlier in the session. Against pound and euro,
rand fell to R21 and R18.44 respectively
It appears that South African economy is on a continuous churn.
Close on the heels of the energy crisis, which is eating into the
vitals of the economy, panic selling set in the stock market over the
impact of the new coronavirus. That pulled down the oil prices, which
is showing no signs of abatement. Concomitant to that, rand also
fell. The rand was down more than 3% to R16.21/ to the US dollar
after reaching R16.97 earlier in the session. Against pound and euro,
rand fell to R21 and R18.44 respectively.
Stocks also plummeted. Nikkei 225 index dropped sharply by 5.10
percent or 1,058.06 points to 19,691.69, while the broader Topix index
was off 5.01 percent or 73.69 points to 1,397.77 on Monday. Stock
exchanges across geographies were also affected. Shanghai Composite
Index declined by 1.56 percent while the benchmark Philippine Stock
Exchange index dropped nearly four percent. The foreign exchange
markets also reverberated with uncertainty from Tokyo to the United
States, direct fallout of Coronavirues, which has spread to almost 80
countries.
In the meantime, Moody’s has cut the growth forecasts for G-20
countries for the first half of 2020, given the impact of the
coronavirus on economic activity. The ratings agency anticipates that
the coronavirus will “hurt” economic growth in many countries, due to
slowing business and consumer activity.
Moody’s pegs the group of G-20 economies at 2.1% during 2020, 0.3
percentage points lower than the previous forecast a three weeks ago
in mid-February. Moody’s also lowered SA’s growth forecast for 2020
from 0.7% to 0.4%. China’s growth forecast has been lowered from 5.2%
to 4.8% and the US forecast has been lowered from 1.7% to 1.5%. In
South Africa, over 300 people have been afflicted by the disease and
the rate may increase, if the contagion spreads to more areas.
