Speculators drive rand to new low
THERE is no let-up for SA's financial markets. Gold and the rand hit new lows on Friday as speculators targeted currencies in South Africa and Zimbabwe.
Gold prices were at fresh 12-year lows on Friday, slipping briefly below the psychologically significant $300/oz level. The London afternoon fix of $301.75 was the lowest since March 1985.
The market had been unsettled since Wednesday when the Bundesbank announced it had been lending part of its gold reserves to the market for about a year.
The 1985 lows at $285 were the obvious target on the downside. "After that it is unknown territory," one analyst said.
The rand was hammered by gold's slump and a currency crisis in Zimbabwe. It slumped to an all-time low of R4.872 against the US dollar before firming to R4.845.
The Zimbabwe dollar fluctuated wildly on Friday, falling 33% overnight to Z$32.57 against the pound, but it stabilised and ended 10% weaker at Z$27.
Reuter reports telephone lines to most banks were jammed for most of the day. Zimbabwe central bank officials said all but two commercial banks - Standard Chartered and Barclays, the country's biggest - had suspended foreign exchange business.
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