South African rand weakens as government considers more financial support for Eskom

PUBLISHED: Thu, 04 Apr 2019 11:52:25 GMT

JOHANNESBURG (Reuters) – The South African rand weakened early on Thursday, after a senior minister said the government was considering more financial support for the highly indebted utility Eskom.

At 0735 GMT, the rand slipped 0.3 percent from its previous close to 14.1900 against the dollar.

Public Enterprises Minister Pravin Gordhan said on Wednesday the highest levels of government were discussing another support package for the state-run Eskom, which in February was granted a 69 billion rand ($4.9 billion) bailout over the next three years.

Eskom Chairman Jabu Mabuza said on Wednesday that Eskom’s debt would be more manageable if it were 250 billion rand lower.

The South African currency had rallied earlier in the week after the ratings agency Moody’s delayed a review that might have removed South Africa’s last investment-grade credit rating, then struck a surprisingly positive note in a research report.

Stocks opened weaker on Thursday, with the Johannesburg Stock Exchange’s Top-40 Index and the All-Share Index both 0.4 percent lower.

Government bonds were also weaker, with the yield on the 2026 bond adding 1.5 basis points to 8.545 percent.

($1 = 14.2006 rand)

Reporting by Naledi Mashishi; editing by Alexander Winning, Larry King

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