South African rand suffers from new Covid fears, variant

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South African rand.

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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 to as low as 16.2391 against the dollar during Asia’s opening hours on Friday and last traded about 1.6% weaker at 16.2215 per dollar.

The losses came when investors rushed to currencies that are hedged, such as Japanese yen, which strengthened by about 0.6% against the dollar to 114.69 per dollar. USA dollar index, which tracks the dollar against its peers, was at 96,712 – compared to levels below 96.5 seen earlier this week.

World Health Organization officials said on Thursday they monitor a new variant with many mutations of the nail protein – the part of the virus that binds to cells in the body. The health authority is planning a special meeting on Friday to discuss what this could mean for vaccines and treatments.

The variant, called B.1.1.529, has been discovered in South Africa in a small number, according to the WHO.

“We do not know much about this yet. What we do know is that this variant has a large number of mutations. And the concern is that when you have so many mutations, it can have an impact on how the virus behaves,” Dr Maria Van Kerkhove, WHO’s technical director for Covid-19, said in a Q&A that was livestreamed on the organization’s social media channels.

A few hours after the announcement, the UK announced that it would do so temporarily stop flights from six African countries.

– CNBC’s Hannah Miao contributed to this report.

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