South African Rand Sees Sharp Declines Against Dollar in Wake of New COVID-19 Variant

South African Rand coins are seen in this photo illustration taken September 9, 2015. Mike Hutchings/Reuters

The South African rand (ZAR) saw sharp declines against the dollar on Friday after a new variant of the CCP (Chinese Communist Party) virus was detected in the country.

Zar fell below 16.00 to the dollar for the first time this year just one day after Thanksgiving, dropping to as low as 16.2391 against the dollar during Asia trading hours on Friday. The South African rand was last trading at 16.1748.

Stock declines were led by a sharp drop in hospitality shares after a string of countries including Britain announced they were temporarily restricting travel to South Africa and its neighbors, Namibia, Zimbabwe, Botswana, Lesotho, and Eswatini.

The fall comes shortly after the country’s health minister, Joe Phaahla, announced Thursday that a new variant of the COVID-19 virus has been detected in the country.

Scientists are concerned about the new variant because it has a high number of mutations and spreads rapidly among young people in Gauteng, the country’s most populous province, Phaahla said at an online press briefing.

“Over the last four or five days, there has been more of an exponential rise [in new infections],” the health minister said of South Africa’s case numbers of the CCP virus.

Little is known about the new variant, which has also been detected in Botswana and Hong Kong, but South African scientists say it has an unusual combination of mutations and may be able to evade immune responses or make it more transmissible.

To date, 10 cases of the new variant have been confirmed by genomic sequencing, with three cases in Botswana, where it was first detected; six cases in South Africa; and one case in Hong Kong, in a traveler from South Africa.

On Thursday, officials from the World Health Organization (WHO) said they are monitoring the new variant, called B.1.1.529, and are “concerned” about its numerous mutations.

“We don’t know very 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,” said Maria Van Kerkhove, WHO’s technical lead on COVID-19, in a press briefing on Thursday.

“It will take a few weeks for us to understand what impact this variant has on any potential vaccines, for example,” Van Kerkhove said. “This is one to watch. I would say we have concerns, but I think you would want us to have concerns...We have people who are on this.”

The health agency is scheduling a special meeting Friday to access the new variant.

Meanwhile, scientists in South Africa are working to determine what percentage of new COVID-19 cases in the country have been caused by the new variant.

Mimi Nguyen Ly and The Associated Press contributed to this report.