South African Currency Plunges to New Low Versus the Dollar a Day After the US Accused Country of Secretly Supplying Ammunition to Russia

The South African currency’s speech complaint versus the U.S. dollar plunged to a caller all-time debased of ZAR19.51:US$1 connected May 12. The rand’s latest autumn came a time aft the U.S. ambassador to South Africa accused the state of secretly supplying weapons to Russia. Banking elephantine JP Morgan said it present projects South Africa’s gross home merchandise to declaration by 0.2%, down from the earlier affirmative projection of 0.3%.

South Africa Denies It Supplied Ammunition to Russia

The speech complaint of the South African currency versus the greenback fell to a caller all-time debased of 19.51 units of the rand for each dollar connected May 12. The rand’s plunge came a time aft the African state was accused of secretly supplying ammunition to Russia by a United States ambassador.

With this latest drop, the South African rand depreciated by much than 5% successful conscionable 1 week and much than 12% since the commencement of the year. Before hitting the caller low, the South African rand’s erstwhile all-time debased was acceptable connected April 5, 2020.

Reuben Brigety, the U.S. ambassador to South Africa, revealed connected May 11 that his state believes Russia, which invaded Ukraine successful Feb. 2022, took possession of the weapons successful precocious 2022. Addressing journalists aft dropping the bombshell, Brigety said the substance was highly superior and that the United States does “not see this contented to beryllium resolved.” The ambassador nevertheless said the U.S. is inactive keen connected seeing South Africa signifier its alleged “non-alignment policy.”

However, successful effect to the allegations, the U.S. authoritative was summoned for a gathering connected May 12 by the South African overseas affairs ministry. On the aforesaid day, Clayson Monyela, the spokesperson for the ministry, said successful a tweet that his state has “no grounds of an approved arms merchantability by the authorities to Russia related to the period/incident successful question.” Earlier, South African President Cyril Ramaphosa’s bureau suggested that an enquiry to “establish the facts and relation players” was already underway erstwhile the U.S. ambassador went nationalist with the allegations.

Dire Consequences for South Africa

Meanwhile, an earlier News 24 report said the South African rand had mislaid astir 30 cents conscionable moments aft Brigety claimed that a Russian vessel named “Lady R” was loaded with arms and ammunition erstwhile it docked astatine a naval basal successful Cape Town successful December 2022. While South African officials person moved rapidly to contradict Brigety’s allegations, immoderate economical commentators warned of dire consequences for the state if the U.S. decides to retaliate.

According to Nolan Wapenaar, the co-chief concern serviceman of Anchor Capital, the U.S. authorities volition apt respond to the allegation by blocking South Africa’s entree to American markets. Wapenaar explained:

[Brigety’s allegation] is apt to person dire consequences for SA, which could suffer its African Growth and Opportunity Act (AGOA) preferential duty-free marketplace entree to the US.

Meanwhile, successful its latest probe note, the U.S. banking elephantine JP Morgan reportedly said it present expects South Africa’s gross home merchandise (GDP) to declaration by 0.2% successful 2023. This is successful opposition to the erstwhile projection of a 0.3% maturation rate. The banking besides warned that its already pessimistic existent relationship projection for the African state could worsen if an energy concern is not resolved.

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