The rand was one of the worst performing major currencies as demand for China's manufactured goods declined.
South Africa's rand depreciated to the lowest intraday level since March 2009 against the dollar after measures of Chinese manufacturing fell, pushing emerging-market currencies weaker. Bonds declined.
A Chinese purchasing managers' index from HSBC Holdings Plc and Markit Economics declined to 50.5 in December from 50.8 the previous month, while a separate gauge compiled by the statistics bureau and logistics federation fell to 51 from 51.4. A reading above 50 signals expansion.
China is the biggest buyer of South African raw materials, accounting for about 12% of exports, according to government data.
"Emerging-market currencies are weaker in general on a stronger dollar," Ion de Vleeschauwer, chief currency dealer at Bidvest Bank, said by phone from Johannesburg. "Liquidity is thin in the market and moves in the exchange rate are exaggerated."
The rand weakened 1.5% to 10.6570 per dollar by 3:42pm in Johannesburg, the worst performer on Thursday among 16 major currencies tracked by Bloomberg after the Norwegian krone and the Brazilian real. The yield on benchmark government bonds due December 2026 rose six basis points, or 0.06 percentage point, to 8.31%, the highest level on a closing basis since December 6.
Foreign investors bought a net R121-million of South African bonds on December 31 and sold a net R301-million of equities, according to data from the Johannesburg Stock Exchange. – Bloomberg