South African rand.

RapidEye | iStock | Getty Images

The South African rand fell sharply against the dollar on Friday after a new variant with many mutations was discovered in the country.

The currency fell as low as 16.2391 against the greenback during Friday’s Asian session and was last trading 1.6% weaker at 16.2215 per dollar.

The losses came as investors rushed to safe currencies like the Japanese yen, which rose about 0.6% against the greenback to hit 114.69 per dollar. The US dollar index, which tracks the greenback versus its peers, was 96.712, compared to below 96.5 earlier this week.

A currency analyst told CNBC’s Street Signs Asia on Friday that the large move in the rand may be due in part to fewer trades being made during the Asia hours.

“This fundamental news of the new variant in [South] Africa, combined with the low liquidity in Asia, is definitely driving some of that price movement, “said Adarsh ​​Sinha, co-head of Asian rates and currency strategy at Bank of America Securities.

World Health Organization officials announced Thursday that they are monitoring a new variant with numerous mutations in the spike protein – the part of the virus that attaches to cells in the body. The health authority is planning a special meeting for Friday to discuss what this can mean for vaccines and treatments.

According to the WHO, the variant with the designation B.1.1.529 was found in small numbers in South Africa.

“We don’t know much about it yet. What we do know is that this variant has a large number of mutations. “Dr. Maria Van Kerkhove, WHO technical director on Covid-19, said in a question-and-answer session that was broadcast live on the organization’s social media channels.

Hours after the announcement, the UK announced it would temporarily suspend flights from six African countries.

– CNBC’s Hannah Miao contributed to this report.


Please enter your comment!
Please enter your name here