South Africa announces a 69 billion rand bailout of Eskom

USD/ZAR D1 20-02

USD/ZAR hits a seven-week high as the rand weakens following the South African Treasury's decision to bailout the struggling state power utility firm, Eskom. The firm requested for the Treasury to take on its 100 billion rand debt but that request is seen to be rejected. Instead, the Treasury will inject 23 billion rand into the firm over the next three years.

Aside from that issue, weakening economic growth and falling tax revenue are among other reasons cited for the budget deficit forecast of 4.5% for the year starting 1 April; that represents the widest budget deficit faced by the country since fiscal year 2010.

Just be wary of the impact of this towards emerging market currencies. The Turkish lira is also weaker as a result following the announcement here.