South African Rand Tumbles to Record Against Dollar, Euro

  • Emerging market currencies from real to lira decline
  • Rand extends losses against dollar to 18% so far this year

South Africa’s rand tumbled to a record against the dollar and euro and traded near its lowest levels against the pound as renewed concerns over China’s growth weighed on the currencies of emerging markets.

The rand weakened to as low as 14.0813 per dollar and was trading 1.4 percent weaker at 14.0555 by 3:34 p.m. in Johannesburg during a public holiday. It fell 2 percent to 15.8142 per euro and declined 1.4 percent to 21.4315 per pound.

The currencies of emerging markets from Brazil’s real to the Turkish Lira weakened on Thursday after a Chinese private gauge of manufacturing data missed estimates and signaled a contraction for a seventh month. South Africa’s Reserve Bank kept its benchmark rate unchanged on Wednesday as growth concerns outweighed risks stemming from weaker currencies after the U.S. Federal Reserve last week delayed monetary-policy tightening.

“The movement of the rand is sharply in line with that of most emerging currencies so that would suggest the factors are largely external,” William Jackson, a London-based emerging-market economist at Capital Economics, said by phone. The decision by the central bank to keep rates unchanged “may have played a role” as well, Jackson said.

The currency of Africa’s most-industrialized economy is extending losses of more than 18 percent against the dollar so far this year in step with the currencies of other markets that are dependent on China’s demand for their commodity exports. The Asian nation, the world’s second-largest economy, is likely to cut its target for economic growth next to between 6.5 percent and 7 percent, according to economists in a Bloomberg Survey.

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