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Rand hits fresh 14-year low as economy struggles

Johannesburg - The rand touched a fresh 14-year low against the dollar on Wednesday amid concerns about the ailing local economy and after a US Federal Reserve official backed a US rate hike next month.

Investors are worried that growth in the economy has remained subdued since a 2009 recession with output seen below 2% this year, partly due to the electricity crisis.

Economic Development Minister Ebrahim Patel said on Wednesday that the key mining sector, which accounts for about 7% of GDP, is in "trouble" as it struggled with widespread job losses and lower commodity prices.

READ: Mining sector in trouble, says Ebrahim Patel

The rand hit a session low of R12.7725, its weakest since December 2001 according to Thomson Reuters data. The local unit was trading at R12.7580 by 08:31, down 0.1% from Tuesday's close.

The move partly reflected a stronger dollar after a US Federal Reserve official expressed support for an interest rate hike in September.

"The rand’s upward assault on 12.80 continues, albeit at a far more measured pace than last week," Rand Merchant Bank's John Cairns said in a note.

"Movements are indicative of dulled investor sentiment toward the broader emerging market complex as evidenced by the continued weakness in the rand’s commodity-linked peers."

Government bonds were also sold in early trade, with the 2026 benchmark yielding 5.5 basis points higher at 8.275%.


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Rand - Dollar
18.93
+0.0%
Rand - Pound
23.89
+0.0%
Rand - Euro
20.39
+0.2%
Rand - Aus dollar
12.33
+0.1%
Rand - Yen
0.13
+0.0%
Platinum
908.05
+1.2%
Palladium
1,014.94
+1.3%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
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