Rand on shaky ground as power supply wobbles

Johannesburg - The rand remained on the back foot against the dollar on Wednesday after weakening to one-week lows overnight, as investors fretted about the impact of the electricity shortage on economic growth.

At 08:36, the rand traded at R11.5800 per dollar, within a whisker of Tuesday's close of R11.5855.

It had fallen to R11.6100 in the previous session, its weakest level since January 20 according to Thomson Reuters data, weighed down in large part by power utility Eskom's warning that the national grid remained under severe strain.


Eskom, which supplies about 95% of the power, was forced to implement controlled outages - referred to as "load shedding" - for the second day in a row on Tuesday to avoid triggering a total collapse of the national grid.

"The rand has been hurt by negative sentiment and the adverse gross domestic product implications surrounding Eskom’s latest round of load shedding," Barclays Africa said in a statement.

Markets were also waiting for the US Federal Reserve's statement due later on Wednesday for pointers on the timing of policy tightening in the world's biggest economy.

Government bonds edged higher on Wednesday, and the yield on the benchmark maturing 2026 eased 3 basis points to 7.17%.