(Reuters) -South Africa’s rand weakened on Friday as fears of recession spread around the world following decisions by several central banks to raise interest rates to tame inflation.
At 1618 GMT, the rand traded at 16.0400 against the dollar, down 0.25% from its previous close.
The dollar index, which measures the U.S. currency against six peers, was up 0.97% to 104.89. [nL1N2Y410W]
Currency markets have been roiled by one of the biggest runs of monetary policy tightening in decades, including the Federal Reserve’s mid-week three-quarters-of-a-percent rate increase, its biggest since 1995, and the Swiss National Bank’s surprise decision to hike rates by 0.5%.
ETM Analytics said in a research note that the dollar/rand is expected to remain volatile into next week.
“Rising US Treasury yields and a bearish bias in global equities means the ZAR’s resilience will continue to be tested in the near term,” ETM said.
On the stock market, the Top-40 index fell 3.4% while the broader all-share index dropped 3.13%.
The government’s benchmark 2030 bond was stable at 10.245%.
(Reporting by Bhargav Acharya in Bengaluru and Anait Miridzhanian in Gdansk;Editing by Robert Birsel and Andrew Heavens)
