South Africa’s rand extended losses against the dollar on Friday, falling to a new 13-year low, as the U.S currency firmed on expectations the Federal Reserve could hike rates by June.
The rand breached the psychological 12.5000 level to the dollar on the day and was trading 1.51% weaker at 12.4662 as of 17:12.
The rand has dropped to its weakest levels since 2002 in the past week as riskier emerging market assets came under pressure on increased expectations that the Federal Reserve could raise rates by the middle of this year.
“It remains a dollar scenario, the dollar is just not stopping, emerging markets in general are under huge pressure,” said Ion de Vleeschauwer, a currency dealer at Bidvest Bank.
Vleeschauwer said the “13.0000/dollar will be the next target for the market to chase and looks like it’s going to be achieved without much hassle.”
The currency of Africa’s most advanced economy, whose markets are highly liquid, took the brunt of investors’ exit from emerging markets because of its longstanding budget and current account deficits.
Government bonds tracked the rand, with the yield for the 2026 benchmark down 12.5 basis points to 8%.