Rand Hits its Weakest Level on Record

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THE rand plunged to a record low against the US dollar on Monday, recording its biggest daily loss in 19 months as rising concern about waning growth in China hit commodity currencies.

The rand briefly dropped to R14 against the dollar, its weakest level on record according to Thomson Reuters data. The local unit was at R13.3100 by 8.13am, down 2.6% from its close on Friday.

The rand was the hardest hit among 25 emerging market currencies as investors sold off high-risk assets amid worry about the effect of slowing global growth in the world’s second biggest economy.

The rand, which is already down more than 15% against the dollar this year, has been particularly vulnerable because of the country’s wide current account balance and concern about sluggish domestic growth.

“Fears over China’s economy have spooked the markets,” Rand Merchant Trade analyst John Cairns said.

“Nerves were on edge after Wall Street dropped 3% on Friday, but an 8% drop in Chinese markets has seen panic spiral.”

Reuters