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The South African rand has hit a new low against the US dollar, currently trading at ZAR19.51:US$1. The currency has lost more than 12% since the beginning of 2023 and more than 5% in one week. The fall came after the US ambassador to South Africa claimed the country was secretly supplying weapons to Russia, which the South African government has denied. JP Morgan has cut its projection of South Africa’s GDP growth from 0.3% to a contraction of 0.2% and warned that its current account projection could worsen.
This article originally appeared on news.bitcoin.com
The South African currency, the rand, has plunged to a new low against the US dollar, just a day after the United States accused the country of secretly supplying ammunition to Russia. The allegations have sparked concerns among investors, as the economy is already struggling under the weight of the coronavirus pandemic.
The rand fell by almost 2% against the dollar following the accusations, reaching a value of 14.28 per dollar. The weakened currency is a blow to the country, which is already grappling with high unemployment, low growth, and a debt crisis.
The US issued its accusations on Tuesday, stating that it had evidence that South Africa had violated an international arms embargo by supplying ammunition to Russia. The US says that South Africa is helping Russia to support the Syrian government in its ongoing civil war, which has killed over 500,000 people and displaced millions.
The South African government has denied the allegations. In a statement released on Wednesday, the country’s Department of International Relations and Cooperation said that it had not received any evidence from the US to support the claims. The department called on the US to provide proof of the allegations, saying that they were damaging to the country’s reputation.
The allegations may have further consequences for the country’s struggling economy. South Africa’s debt was downgraded to junk status by credit rating agencies earlier this year, and the government is struggling to contain rising debt levels. The weakened rand may make it more difficult for the country to service its debts and attract foreign investment.
The news of the allegations comes at a time when interest in cryptocurrencies is growing in South Africa. Bitcoin is particularly popular, with many investors turning to the cryptocurrency as a hedge against economic uncertainty. The cryptocurrency may see a boost in demand as the weakened rand prompts investors to seek alternative investments.
In summary, the accusations made against South Africa by the US have sparked concerns among investors, causing the country’s currency to fall to a new low against the dollar. The allegations may also have consequences for the struggling economy, which is already grappling with a debt crisis. The news may lead to increased interest in cryptocurrencies such as bitcoin, which are viewed as a hedge against economic uncertainty.
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