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Rand Trims Gains, NERSA Refuses To Meet Eskom's Tariff-Hike Request

ZAR

Spot USD/ZAR has now recouped losses registered on the back of U.S. CPI data earlier in the day, as the Eskom situation, concerns about SARB autonomy and moderation in commodity market strength creating headwinds for the Rand.

  • South Africa's energy regulator (NERSA) rejected Eskom's request for a 32% tariff hike and opted for a smaller 18.65% increase effective from Apr 1. The body also approved a 12.74% tariff increase for next year, which is less than the 22.52% asked for by the cash-strapped electricity utility. While Eskom is struggling to finance diesel purchases, larger tariff hikes would create considerable burden on South African consumers.
  • USD/ZAR operates at ZAR16.8656, down ~520 pips worse off on the day, as the rate failed to consolidate below its 200-DMA (ZAR16.8126).

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