Picture: 123RF/LEON SWART
Picture: 123RF/LEON SWART

The rand fell to its worst level against the dollar since early January on Wednesday afternoon, weighed on by pressure on emerging-market currencies.

The Turkish lira is taking the spotlight off the rand, having seen wild swings as investors consider how that country’s central bank may be intervening in its currency market.

The rand was, however, faring slightly worse than the lira on Wednesday afternoon, with a host of local risk events on investors' radars, including the Reserve Bank interest rate decision on Thursday, and a credit-rating announcement by Moody's Investors Service on Friday.

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Turkey is guarding against a re-occurrence of Friday’s sell-off that sent emerging-market currencies into free fall by making it all but impossible for foreign investors to exit their lira positions ahead of this weekend’s local elections, Rand Merchant Bank analyst Nema Ramkhelawan-Bhana said.

The risk associated with blocking volatility in the lira could diminish investor appetite for other emerging-market currencies, including the rand, FXTM head of global currency strategy Jameel Ahmad said.

At 3pm the rand had weakened 1.25% to R14.5978/$, 1.26% to R16.4546/€ and 1.51% to R19.3297/£. The euro was flat at $1.1271.

Other event risks also loom, with the UK parliament scheduled to conduct a series of votes on Brexit as it seeks to chart a way forward for Britain’s exit from the EU.

US-China trade negotiations also resume on Thursday, and will be closely watched.

gernetzkyk@businesslive.co.za