South Africa’s rand hit a three-week low on Wednesday as the U.S. currency strengthened and the deputy central bank governor warned domestic economic growth continued to disappoint.
At 1520 GMT the rand was trading 0.75 per cent weaker at 11.8500 to the dollar, its weakest level since Feb 12.
Deputy Central Bank Governor Francois Groepe said on Wednesday economic growth was disappointing, but the bar for South Africa to ease monetary policy remained high, with underlying inflationary pressures persisting.
Emerging market currencies are set to sink further into decade or even record lows against the dollar as interest rates start rising off zero in the United States, a Reuters poll predicted on Wednesday.
“Emerging currencies in general remain on the back foot. It doesn’t look good for the (rand) for the weeks ahead because the dollar remains the currency of choice for now,” said Ion de Vleeschauwer, a currency dealer at Bidvest Bank.
U.S. jobs data due on Friday was also on investors’ minds, pushing the dollar index to an 11 1/2-year high.
In fixed income, government bonds also weakened with and the yield for the 2026 benchmark up 5 basis points to 7.760 per cent.