Why South Africa’s Eskom Has Become An Important Fundamental Indicator

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Eskom has played a big role in South Africa's economy for the last two quarters. There are a number of industries that are crucial to the upkeep of the economy, however, the national power station of the country has experienced a number of breakdowns which has made generating electricity much harder.

The government entity also announced a further increase in Load Shedding times as the government lacks the funds to purchase diesel to power those backup generators. There are multiple cases of broken-down power stations so even though there are being attended to there are just not enough up-and-running facilities to power the whole country

The government has been looking for investment in the energy sector. In the last COP27 meeting Cyril was able to secure an investment of billions of rands that is to be partially funneled into Eskom. The plan is to decommission the current coal facilities and opt for better energy resources. We should begin looking for announcements for the project to begin. This is going to bring jobs to the market and will also have implications for the economy.

As a trader in South Africa, you need to pay close attention to the announced levels from this point on.The higher the level of Load Shedding, the more affected the economy of South Africa becomes. As we go into the week with an announced level 5 to be implemented we should expect the Rand market to lose strength.