Rand hits new record low, shares dip
Investors are worried about sluggish growth in Africa’s second largest and most industrialised economy.
JOHANNESBURG - South Africa's rand tumbled two percent to a new record low against the dollar on Thursday as renewed concerns about China's economy spurred an emerging market sell-off.
The fall largely reflected a retreat in emerging Asian currencies as China accelerated the yuan's depreciation, heightening concerns over the world's second-largest economy.
The local unit was also victim to South Africa's weak economic fundamentals, with a survey this week showing a further decline in private sector activity.
The rand fell 2.0 percent to 16.1750 by 0915 GMT.
"Until market sentiment turns for the commodity linked currencies ... there's probably going to be more losses on the cards for the rand," NKC African Economics economist Bart Stemmet said.
South African government bonds weakened alongside the rand, with the yield on the benchmark 2026 issue jumping 10 basis points to 9.655 percent.
The South African bourse was not spared the sell-off, with the Top-40 and the broader all-share indices each down 2.8 percent.
"There seems to be an awful lot of pessimism surrounding financial markets at the moment," Standard Bank trader Warrick Butler said.
Investors are also worried about sluggish growth in Africa's second largest and most industrialised economy and the direction of policy after a cabinet reshuffle in December.
President Jacob Zuma appointed Pravin Gordhan as finance minister on 13 December, in a dramatic U-turn that gave South Africa its third finance chief in a week after a selling frenzy in the markets.