The Rand has dropped almost 8% against the dollar on Monday 9 March 2020 making it the biggest drop since 2016.
On Monday, the exchange rate sat at R16,19 against a dollar.
Jeff Schultz, a senior economist at global bank BNP Paribas South Africa had previously said that he expects 2020 to be another gloomy year for South Africa’s economy, however, he believes the Rand will bounce back.
“The local unit has endured some weakness in recent sessions against the greenback amid concerns over the extent and global ramifications of the mushrooming Coronavirus outbursts,” he said.
While the massive blow to the Rand might have been caused by panic over COVID-19, a new price war between oil producers Russia and Saudi Arabia is believed to have slapped the south African economy even harder.
Oil price crashed heavily since 1991 (Iraq War 1), as Saudi Arabia shocked the market by launching a price war against one-time ally Russia.
US oil prices also crashed as much as 27% and this is believed to have influenced the Rand to heavily drop against the dollar.