The rand had its worst fall in more than a year on Tuesday, dragging local bonds along with it as traders priced in the increased possibility of a more aggressive stance from the US Federal Reserve. Upbeat US retail sales data appeared to convince markets the Fed would raise rates another three times in 2018 as opposed to the priced-in twice. The consensus is that the next increase will come in June, after the increase at the Fed’s March meeting. The weaker rand hit South African stocks, with the all-share index losing 1.23% and the banking index dropping 4.5%. The big four banks — Standard Bank, Barclays Africa, FirstRand and Nedbank — shed about R47bn in market value. A weaker currency usually leads to higher inflation, and eventually higher rates, which depress bank earnings and increase the risk of bad debts. The rand fell as much as 2.5% to R12.65 a dollar, its worst one-day decline since March 2017. The yield on the benchmark R186 bond jumped 17 basis points to 8.49%. Yields r...
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