South Africa's rand crumbled to a new record low against the dollar on Tuesday while yields on bonds rose sharply as concerns about China's economy sunk commodity-linked currencies.
The local bourse opened on the back foot as Asian shares hit 3-1/2 year lows on jitters about Chinese growth, with the benchmark Top-40 index down 0.75 percent at 0710 GMT.
Yields on government bonds were higher, tracking the weaker currency, with the benchmark 2026 issue adding 10 basis points to an 18 month high of 8.66 percent.
"Liquidity remains very thin with local real money mostly on the side-lines while fast money dominates flows," currency traders at Nedbank said in a note to clients.
By 0700 GMT the rand had slipped 0.32 percent to 14.1150 per dollar, having shed more than one percent in the previous session to a fresh record low of 14.1300, with scope for more losses as uncertainty over the timing of an interest hike in the United States stoked volatility.
"The rand is simply suffering from being hit by both risk aversion towards high-yield currencies and the fall in commodity prices," said John Cairns, a currency strategist at RMB.
Worries about the health of the Chinese economy triggered a sharp selloff of emerging markets after industrial firms suffered their biggest profit drop in four years, rattling investor confidence in commodity-linked assets.
"While China got the blame overnight, global focus is still primarily on the Fed," Cairns added.
Bets on when the U.S. Federal Reserve will raise rates continued to oscillate after conflicting comments by influential members of the bank clouded market certainty of a 2015 rate lift-off.