The South African rand dropped today to the three-week low after head of the national roads agency resigned, spurring talks that South Africa’s budget deficit will grow as the country will be required to repay debts of the agency.
The South African National Roads Agency (usually called Sanral) planned to start electronic tolling on 185 kilometers of roads around Johannesburg, but the Pretoria High Court last month made the agency to postpone the project on pressure from consumer and labor groups. The delay caused a resignation of chief executive Nazir Alli. Economists are worried that this event may push rating agencies to lower the nation’s credit rating, making a long-term negative impact on South Africa’s economy.
USD/ZAR climbed from 7.7880 to 7.9110 as of 15:00 GMT today, reaching 7.9350 intraday — the highest rate since April 17.
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