The rand see-sawed during Finance Minister Tito Mboweni's maiden budget speech on Wednesday afternoon.
The rand opened at R14.04 to the greenback earlier in the day but plummeted during the first part of Mboweni's speech, said TreasuryONE.
It declined the most among the world's major currencies and bonds fell after the government unveiled a bailout plan that could strain the nation's finances, Bloomberg reported, sinking as much as 2.3%.
It pulled back from a low of R14.37/$ as Finance Minister Mboweni progressed through the speech, placing particular emphasis on the fact that government would not take on Eskom’s debt, commented Bianca Botes, Corporate Treasury Manager at Peregrine Treasury Solutions.
"The unexpected decrease in CPI, 4% versus the expected 4.3%, from the previous 4.5%, had done little to support the currency as markets geared up for the budget speech," Botes said. "Once the Budget Speech began, the bloodbath was in full swing."
The rand, however, regained some ground to trade at R14.13.
"This was the sort of level seen just before the start of the Budget speech," said TreasuryONE.
By the time Mboweni completed his speech, the rand was changing hands at R14.17 to the greenback.
According to Botes, the conditions of government's financial assistance to Eskom will be scrutinised by ratings agency Moody's, which warned of the potential implication a bailout could have on the local sovereign rating.