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South Africa's Rand Falls To 4-Year Low, Bond Yields Up
South African bank notes featuring an image of former South African President Nelson Mandela are displayed at an office in Johannesburg January 17, 2013. PHOTO BY REUTERS/Siphiwe Sibeko.
28/08/2013
OHANNESBURG (Reuters) - South Africa's rand tumbled to a four-year low on Wednesday, extending the week's losses in a global sell-off of emerging markets and driving bonds to their lowest in months.
The rand softened for the third straight day, falling as low as 10.5100 to the dollar, its weakest since March 2009.
Investors have been moving out of risky emerging markets because of uncertainty over whether the United States will continue its massive stimulus programme and the possibility of military intervention in the Syrian crisis.
South Africa is more vulnerable to external shocks than its peers because of negative sentiment around labour strikes in leading sectors of the economy such as manufacturing, which add to concerns about the gaping current account deficit.
Market players said there looked to be no impetus for investors to undo their long dollar positions and the rand would likely stay weaker for the remainder of the session.
The rand was the third weakest currency after the Turkish lira and Indian rupee amongst a basket of emerging market currencies trading against the dollar and tracked by Reuters.
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