South Africa’s rand fell to its softest in nearly 14 years against the dollar on Wednesday as a rout in commodity currencies continued after China devalued the yuan.
China’s move has piled pressure on the rand, already down 11 percent this year as investors have sold off emerging market assets in anticipation of the U.S. Federal Reserve starting tightening policy.
At 0647 GMT the rand was at 12.8550 to the dollar, down 0.58 percent from Tuesday’s New York close at 12.7805.
It had touched a low of 12.8750 earlier in Wednesday’s session, its softest level since Dec. 2001, according to Thomson Reuters data.
The rand tracked currencies in commodity producers such as the Australian dollar, which tumbled to its lowest level since 2009 after the Chinese central bank set the midpoint for its yuan at the weakest level since October 2012.
“The rand is in a bear trend; if you did not want to accept that or think that we may get consolidation or correction, then you would have been badly burnt yesterday and indeed this morning,” Standard Bank trader Oliver Alwar said.
Government bonds however held their ground, with the yield for debt due in 2026 falling 6 basis point to 8.11 percent.