The rand fell to its weakest level against the dollar in 13 years as Greece and Germany head for a showdown that is sapping investor appetite for risky assets.
The rand fell 1.8 percent to R11.8884 per dollar by 5.37pm in Johannesburg, its weakest level since March 2002 and the worst performance among 24 emerging-market currencies tracked by Bloomberg after Russia’s rouble.
By 5pm the rand was bid at R11.8668, 16.58c weaker than at the same time on Tuesday.
The currency has depreciated 5.2 percent in the past four trading days. “When the global investor market smells blood, they take this currency apart,” Ion de Vleeschauwer, the chief dealer at Bidvest Bank, said.
“It’s dramatic and vicious.”
Emerging market stocks fell for a fourth day and currencies weakened as investors await talks between Greece and its creditors, with Germany maintaining that the nation must comply with bailout terms.
Electricity shortages and slumping mining output are also curbing investor demand for domestic assets.
Eskom said yesterday there was a “high probability” that it might double the size of power cuts. The blackouts have forced businesses to shut doors at peak times, curbing growth in Africa’s most-industrialised economy.
Yields on benchmark government rand bonds due December 2026 climbed for a ninth day, rising three basis points to 7.62 percent.
Mining production contracted 1.8 percent in the year through December, a report showed yesterday, according to the median estimate of eight economists in a Bloomberg survey.
Raw materials accounted for about 60 percent of South Africa’s exports in 2014, according to government data.
“As the highlight is on weak commodity markets, soft mining production data out of South Africa” might prompt investors to sell the rand, Ipek Ozkardeskaya, a market analyst at Geneva-based Swissquote Bank, said.
Imports into China, the biggest buyer of South African raw materials, shrank almost 20 percent in January, data showed on Sunday.
Bloomberg