Rand unravels after another wild week for global markets
The rand came unstuck on Friday morning, reflecting the deterioration in global sentiment.
The local currency shed nearly 1% against the dollar, putting it on track for the second consecutive weekly decline.
Other emerging-market currencies, including the Turkish lira, were also under pressure. Emerging market assets tend to suffer when their peers are battling because investors perceive them as more risky.
Global growth concerns appear to be on the radar again, after China’s retail sales and industrial output for November disappointed.
Oanda analyst Stephen Iness said: “Investors are right to be worried about global growth as the Chinese economy continues to sputter.
“The data lends support to the market’s view that things will get worse in China before they get better, this despite investment rising.”
The rand has had another wild run this week, as it weakened to a one-month low of R14.48/$ before bouncing back to R14.04/$ and subsequently retreating to R14.34/$.
The weaker rand has the potential to stoke inflation, which accelerated to an annual rate of 5.2% in November, from 5.1% in October.
The weaker currency contributed to the Reserve Bank raising interest rates by 25 basis points to 6.75% in November, for the first time in two years
At 9.50am, the rand was 0.97% weaker at R14.3123/$, 0.91% to R16.2469/€ and 0.66% against the pound at R18.0635/£. The euro was relatively flat to the dollar at $1.2658.
Local bonds were also weaker, with the yield on the benchmark R186 rising to 9.21%, from 9.13% at its last settlement.