The recently announced poll result giving victory to the Republican candidate, Donald Trump has seen the SA rand plummeting once again.
The rand which regained strength after NPA’s withdrawal of court charges against the state’s finance Minister, Pravin Gordhan, has yet been hit by the news of Trump’s winning as the United State’s president-elect.
The rand has reportedly weakened to over 4.6% moving from an overnight low of R13.18 to levels as high as R13.79 in the morning. It is currently trading below R13.72 to the dollar.
Donald Trump shattered expectations on Tuesday with an election night victory that revealed deep anti-establishment anger among American voters and set the world on a journey into the political unknown.
The Republican nominee had despite series of controversies that would have seen the end of his political career, alongside a record of racist and sexist behaviour, and a lack of conventional political experience scaled through, becoming the first President of the United States with no previous political portfolio.
At 2.30am, (US time), the Associated Press projected Trump had won Wisconsin and called the overall race for Trump, who passed the 270 electoral college votes he needed to secure the presidency.
At this announcement, reports had it that the dollar also plummeted while stocks sank in market mayhem as investors faced the shock of Trump’s victory.
Dr. Heinrich Bohlmann, a senior lecturer of economics at the University of Pretoria had earlier projected that if Trump wins, there will be repercussions in markets all over the world.
He said that the poor performance of the stock market in the past week can be attributed to the increase in support for Donald Trump in opinion polls.
“That suggests markets favour Clinton to win. Why? Simply put, there is a lot more policy uncertainty involved in the near term with a Trump presidency than a Clinton presidency.” And according to Bohlmann the financial markets and investors do not like uncertainty as it means more risk.
According to Heinrich the financial markets will recover if it Hilary who won the election. But now that it is Trump, Heinrich said he expects a similar reaction to what happened after the Brexit vote shock.
Like the SA rand and US dollar, Mexico’s peso also plunged to its lowest-ever levels at the news of Trump’s victory.
The Mexican economy had been unstable for months following Trump’s possible victory even as he had threatened to rip up a free trade agreement with Mexico and tax money sent home by migrants to pay to build a wall on the southern US border.
Bohlmann has however urged South Africans not to count on who the leader of the US is to determine their fortunes, they should rather focus on electing good leaders themselves.