Jun 11, 2013
Rand hits 4-year low, SA stocks tumbleBack
Gold|Africa|Platinum|Rand Merchant Bank|Africa|Australia|China|South Africa|Mining|Top 40|Jim Bryson
At 09:29 GMT, the rand was at 10.353, having fallen as low as 10.36, its weakest level since early March 2009.
Although investors are worried about more labour unrest in South Africa's mining sector, traders said the rand was mainly following currencies such as Australia's dollar, which fell to its lowest in nearly three years amid concerns about a slowdown in China.
"The Aussie led the way and we are just joining in," Rand Merchant Bank trader Jim Bryson said.
South Africa's stock market was also hit hard, with the blue-chip Top 40 index shedding 2%. Mining companies were hit after data showed South Africa's gold and platinum output fell in April.
Bond yields continued their sharp upward trajectory, with the yield on the benchmark 2026 issue jumping 27 basis points to 8.535%, its highest since April 2012.
At an auction on Tuesday morning, the government sold a total of R2.35-billion rand its 2031, 2041 and 2048 bonds, but was forced to pay interest rates of more than 9%, suggesting the costs of government financing are set to rise sharply.
The cost of insuring South Africa's debt against default also rose to a 17-month high, according to Markit.
Edited by: ReutersComment Guidelines (150 word limit)
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