Rand crashes through R15.50/$ - has lost 6.5% this week

The rand fell by almost 2% on Wednesday morning to crash through the R15.50/$ level. 

At 10:15 the local currency was changing hands at R15.62/$, down 1.85% on the day. At 13:47 the local currency was trading at 15.55/$. 

The rand also broke the R20 to the pound level in morning trade. By 13:47 it had recovered slightly to change hands at R19.89/pound. 

This comes after poor GDP data on Tuesday confirmed that SA was in a technical recession. The local currency opened the week's trade at R14.67/$.

"While the Rand has been under pressure with the EM crisis currently in the market, the release of the second quarter GDP number only increased the negative sentiment on the rand," said Andre Botha, of TreasuryONE in a statement. 

In three days it has lost about 6.5%, making it one of the worst performing emerging market currencies so far this week. 

Bloomberg reports the rout in emerging markets showed no sign of letting up, with most currencies weakening and an index of stocks heading toward a bear market.

South African bonds led the sell-off in fixed income as the rand weakened to its lowest level in more than two years.

Adam Phillips, a Treasury Specialist at Umkhulu Consulting, said in an earlier morning note that the rand could fall as low as R15.75 the greenback. 

"In terms of the ZAR (along with other emerging market currencies) it is a case of waiting to hear the next negative news," he said.  

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER