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Johannesburg - The rand fell to its worst level against the dollar in six years on Monday after the country's third-quarter current account deficit widened more than the market had expected.
The rand fell by more than 1% after the SA Reserve bank said the shortfall on the current account balance narrowed to 6% of gross domestic product from a revised 6.3% previously against economist's expectations of a 5.8% gap.
By 08:46 GMT the rand had weakened 1.08% to R11.4560 per dollar, its lowest level against the dollar since October 2008.
Chronic deficits on South Africa's current account and national budget have tended to make the rand more vulnerable than its peers when investors dump emerging market assets during episodes of global risk aversion.
"Despite the revision to GDP, the current account deficit for the third quarter prints wider than the consensus had expected," Standard Chartered economist Razia Khan said.
Fiscal deficits that remain higher than government targets have also exacerbated faltering production in 2014 that was hurt by prolonged labour stoppages in the first half of the year and an increasingly unreliable electricity supply.
"Coming ahead of the Fitch ratings review of South Africa on Friday, this will only add to the list of negatives currently facing South Africa," Khan added.
The currency was already under pressure after Eskom said on Monday power shortages would continue into the week.
Eskom said it would institute further rolling blackouts, following its largest power cuts in nine months over the weekend, as one of its power stations failed to operate at full capacity.
Government bonds also weakened, with the yield on the benchmark issue due in 2026 adding 4 basis points to 7.805%.
In a further knock for the rand, data on Monday showed Chinese demand for imports fell by 6.7%, the biggest drop since March and a further sign that the world's second-biggest economy, and a major export destination for South Africa, is cooling.
