Johannesburg - The rand tumbled to a record against the euro and traded near its lowest levels against the dollar and the pound as renewed concerns over China’s growth weighed on the currencies of emerging markets.
The rand weakened to as low as R15.8176 to the euro and was trading 2 percent weaker at R15.813 by 3.05pm in Johannesburg. It dropped 1.3 percent to R14.0350 to the dollar and declined 1 percent to R21.347 to the pound.
Emerging market currencies from Brazil’s real to the Turkish lira weakened yesterday after a Chinese private gauge of manufacturing data missed estimates and signalled a contraction for a seventh month.
The SA Reserve Bank kept its benchmark rate unchanged on Wednesday as growth concerns outweighed risks stemming from weaker currencies after the US Federal Reserve delayed monetary policy tightening last week.
“The movement of the rand is in line with that of most emerging currencies so that would suggest the factors are largely external,” William Jackson, an emerging market economist at Capital Economics in London, said. The bank’s decision to keep rates unchanged “may have played a role” as well, he said.
BLOOMBERG