South African’s economy may just be the worst hit as geo-political tension escalates in Mid East, DDM can report.
The rand, South Africa’s local currency, lost value in trading early on Friday due to reports of an Israeli attack on Iran.
It is not yet clear why the conflict is impacting on Africa’s largest economy.
But South Africa grabbed global headlines in the conflict what with its resort to taking Israel to World Court over alleged acts of genocide in Gaza.
Other thinking among economic wonks has it that investors may well be willing to making quick profit from the conflict.
But the news of Israel attack made investors nervous, causing them to move their money to safer assets like the US dollar and gold.
The rand initially dropped to a two-month low against the dollar but later recovered slightly when Iran indicated it had no immediate plans for retaliation and reported minimal damage from the attack.
The rand was trading at 19.2300 against the dollar, down 0.38% from the previous day.
The stock market in South Africa also showed weakness, with both the Top-40 index and the all-share index trading lower in early trade.
Despite a slight decrease, the dollar remained strong against other currencies. Iran’s decision to lift flight restrictions after the attack suggested to some analysts that the situation might not escalate further.
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