JOHANNESBURG (Reuters) -South Africa’s rand weakened against the dollar on Thursday, after the U.S. Federal Reserve signalled that it will not slow down the pace of its interest rate increases.
At 1605 GMT, the rand traded at 18.4075 against the dollar, 0.75% weaker than its previous close.
The Fed raised interest rates by 75 basis points on Wednesday and said its battle against inflation would require borrowing costs to rise further.
Fed Chair Jerome Powell, speaking at a news conference at the end of a policy meeting, said it was “very premature” to discuss when the Fed might pause its rate increases, sending jitters through the markets.
Emerging market currencies such as the risk-sensitive rand are highly susceptible to global drivers like U.S. monetary policy.
On the Johannesburg Stock Exchange, the Top-40 index was down 1.67% while the broader all-share index traded 1.6% lower in afternoon trade.
The stock market was most negatively affected by the resources index, mainly pulled down by miners Anglo American, Impala Platinum and Sibanye-Stillwater, which fell more than 3%-10%.
The government’s benchmark 2030 bond was weaker in afternoon deals, with the yield up 7.5 basis points to 10.795%.
(Reporting by Bhargav Acharya and Anait Miridzhanian; Editing by Bernadette Baum)
