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Johanesburg - The rand weakened against the dollar on Wednesday, hit by a broad sell-off in emerging market assets that pushed it back toward the psychologically important level of R11/$.
Investor sentiment towards emerging markets soured on Wednesday with political turmoil in Ukraine putting pressure on already vulnerable currencies such as Turkey's lira and the rand.
The rand fell to a session low of R10.9750/$, its weakest so far this week, from its close of R10.8750/$ in New York on Tuesday. By 15:45 GMT it was down 0.4% to R10.9200/$.
The currency found little relief from higher-than-expected inflation data, which showed consumer prices at their highest in four months and very near the upper end of the central bank's target band of 3 to 6%.
Analysts have said the soft rand will drive the consumer price basket past 6% in a few months.
"The central bank used the likely pass-through effect of the weak rand on consumer prices to justify its surprise decision to hike interest rates in January," said Shilan Shah, an economist at Capital Economics, in a research note.
"A further rise in the coming months means more rate hikes are now on the cards."
The yield on the benchmark 2026 bond touched its highest in the session after the inflation data, but was trading flat at 8.595% by 15:46 GMT.
The 2015 yield rose six basis points to 7.21%.
Investor sentiment towards emerging markets soured on Wednesday with political turmoil in Ukraine putting pressure on already vulnerable currencies such as Turkey's lira and the rand.
The rand fell to a session low of R10.9750/$, its weakest so far this week, from its close of R10.8750/$ in New York on Tuesday. By 15:45 GMT it was down 0.4% to R10.9200/$.
The currency found little relief from higher-than-expected inflation data, which showed consumer prices at their highest in four months and very near the upper end of the central bank's target band of 3 to 6%.
Analysts have said the soft rand will drive the consumer price basket past 6% in a few months.
"The central bank used the likely pass-through effect of the weak rand on consumer prices to justify its surprise decision to hike interest rates in January," said Shilan Shah, an economist at Capital Economics, in a research note.
"A further rise in the coming months means more rate hikes are now on the cards."
The yield on the benchmark 2026 bond touched its highest in the session after the inflation data, but was trading flat at 8.595% by 15:46 GMT.
The 2015 yield rose six basis points to 7.21%.
