Nov. 2 (Bloomberg) -- The rand posted its biggest intraday decline against the dollar in more than a year as the Tokyo Financial Exchange Inc. quoted a price on its Web site that was 35 percent below the rest of the market.

The rand fell as much as 6 percent to 8.2811 per dollar, its weakest level since July 15, before paring the loss to trade 0.3 percent lower at 7.8399 per dollar by 6:05 p.m. in Johannesburg.

The Tokyo Financial Exchange, which provides prices for at least 12 currencies, listed the yen’s Oct. 30 closing price at 8.435 per rand, compared with a level of 11.4562 per rand quoted on Bloomberg. That triggered electronic instructions known as “stop loss orders” to sell the currency, said Peter Attard Montalto, a London-based emerging markets analyst at Nomura International Plc.

The price was “a market rate displayed by a market maker,” the Tokyo Financial Exchange said in a statement on its Web site today. “It was not a system error.”

Calls made to the exchange after business hours were unanswered.

“Last week’s closing price for the rand on the TFX system was unusually low," said Bartosz Pawlowski, an emerging markets strategist at BNP Paribas in London. ‘‘That triggered a lot of margin calls and stop losses in thin trade this morning, which caused the rand to weaken a lot."

‘Mother of Carry Trades’

The rand has rallied 19.9 percent this year as signs of a global economic recovery encouraged investors to buy higher yielding assets such as those in South Africa where the main interest rate stands at 7 percent, compared to near-zero deposit returns in the U.S. and Japan. The currency has slumped in 10 of the past 13 trading sessions, posting its biggest five-day drop in 3 1/2 months last week, after the government announced a doubling of the budget deficit and said it will attempt to weaken the currency to pull South Africa’s economy out of recession.

Investors borrowing in dollars at low interest rates to invest in currencies offering higher returns has led to the ‘‘mother of all carry trades’’ that is fueling ‘‘huge’’ bubbles that may spark another financial crisis, Nouriel Roubini, a New York University professor who predicted the global crisis, said on Oct. 27 via satellite to a conference in Cape Town.

South Africa’s FTSE/JSE Africa All Share Index dropped for a second day, sliding 0.9 percent.

To contact the reporter on this story: Garth Theunissen in Johannesburg gtheunissen@bloomberg.net

Last Updated: November 2, 2009 12:02 EST