South African Rand, Bonds Plunge as Gordhan's Budget Disappoints
- Budget may fail to prevent credit downgrade, analysts say
- `Not enough' to change growth path, Argon's Madisha says
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South Africa’s rand plunged the most in six weeks against the dollar and bond yields soared after Finance Minister Pravin Gordhan failed to convince investors that the nation can avert a credit downgrade to junk.
The currency dropped as much as 3.2 percent, the biggest intraday slump since Jan. 11, and traded 2.5 percent weaker at 15.6211 per dollar by 5:36 p.m. in Johannesburg. Yields on benchmark government rand bonds due December 2026 climbed 18 basis points to 9.34 percent, the highest on a closing basis since Feb. 2. The yield on South Africa’s 2025 dollar-denominated bonds rose 12 basis points, the most in more than two weeks. Stocks pared losses as companies that benefit from declines in the rand gained.