South Africa's rand breached its weakest closing level on record on Wednesday as investors priced in the probability of a central-bank rate cut amid the global risk sell-off.
The currency of Africa's most-industrialized country weakened 2.6% to 17.0559 per dollar by 5 p.m. in Johannesburg, surpassing the 16.8717 closing level of January 18, 2016. It slmed as much as 2.9% to 17.1052 at one point, though it's still some way off the intraday weakest level of 17.9169 reached during a “flash crash” in Asian trading hours that same month.
Money markets are pricing in 53 basis points of easing by the South African Reserve Bank on Thursday, even after data showed consumer inflation climbed above the 4.5% midpoint of the target range for the first time in 15 months in February. The plunge in oil prices should moderate price increases in March.
Yields on 10-year government rand bonds climbed 56 basis points to 11.31%, also a record.
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