JOHANNESBURG: South Africa's rand fell on Thursday, hurt by contagion from a sharp drop in the Turkish lira and signals from the domestic central bank that interest rate increases will probably be slower than markets have priced in.
At 1517 GMT, the rand traded at 15.7050 against the dollar, around 1.4% weaker than its previous close.
The South African Reserve Bank raised its main lending rate by 25 basis points to 3.75%, which would normally support the rand, but some traders focused on the gradual rate path the monetary policy committee appeared to favour.
"The pace of policy tightening will likely be much slower than what the market had priced for," said Kieran Siney, co-head of financial markets at ETM Analytics.
Razia Khan at Standard Chartered said the rand was weakening in sympathy with the lira, which plunged more than 3% after Turkey's central bank defied inflation of 20% to slash interest rates by another 100 basis points.
Johannesburg-listed stocks dipped, with the All-share index closing down 0.11% at 70,867 points.
Financial services group Investec was an outlier, rising 1.9% after it reported a more than two-fold rise in profit and said it would distribute a 15% stake in asset manager NinetyOne to shareholders.
The yield on the government's 2030 bond dipped 1 basis point to 9.455%, reflecting a slightly firmer price.
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