Today's Big Stories

Rand hits all-time low and world markets fall on fears over Chinese economy

Monday's dramatic stock trading has set off alarm bells across the world and global investors are realising the major role that the Chinese economy has on market growth and low global inflation.

The fall-out on global stock markets and South Africa's current account deficit has been cited as driving factors behind a further plummet in the rand.

The local currency was hovering around the 20,85 mark against the British pound on Monday after reaching a record low earlier this month.

The rand now sits at R13,27 to the US dollar and R15,22 to the euro.

Chris Hart, Economist and Chief Strategist at Investment Solutions explains the impact of the market fall.

I'm in Switzerland at the moment. International travel really emphasises how weak our exchange rate is.

Chris Hart, Economist and Chief Strategist at Investment Solutions

The trade in the rand is still significantly weak. Investors do not like risk and they sell off emerging markets.

Chris Hart, Economist and Chief Strategist at Investment Solutions

Shares in South Africa and other stock markets were off-loaded.

Chris Hart, Economist and Chief Strategist at Investment Solutions

China's debt levels have exploded. The debt levels have now exploded, creating unsustainable asset prices.

Chris Hart, Economist and Chief Strategist at Investment Solutions

Central banks will likely hike interest rates in response to this crisis, but the trouble is that inflation has been creeping up because of the weak rand.

Chris Hart, Economist and Chief Strategist at Investment Solutions

Listen to the full conversation from CapeTalk's Breakfast with Kieno Kammies:


This article first appeared on 702 : Rand hits all-time low and world markets fall on fears over Chinese economy


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