Analysis by Amelia Tan
NEW YORK (IDN | Africa Renewal) - By 6:30 a.m. on June 24, less than 12 hours after a successful referendum on Brexit (Britain’s exit from the European Union), South Africa’s currency, the rand, took the first blow. It plunged by almost 8% from R14.33 to R15.45 against the U.S. dollar, its steepest single-day decline since the 2008 financial crisis.
Brexit sent shock waves through the global markets, including those in Africa.
Investors in African markets panicked because many economies (such as Angola, Nigeria, South Africa, and Zambia) were already reeling from low commodity prices exacerbated by a sluggish global demand. In these countries, Brexit added salt to the wounds of injured economies.