Rand at 14-year lows as investors dump emerging currencies

The rand fell more than 1.5 percent to a 14-year low against the dollar on Thursday, and was the weakest performer in a basket of 25 emerging currencies hit by heightened expectations of policy tightening in the United States.

sThe rand has fallen 10 percent since the start of the year as investors expecting rates to rise in the world's biggest economy dump high-yield assets that are perceived as carrying more risk.

The local unit hit a trough of 12.7550 on Thursday, its weakest against the greenback since Dec. 2001, and was trading 1.47 percent softer at 12.735 by 1531 GMT.

Government bonds followed suit, and the yield for debt maturing in 2026 closed 6 basis points higher at 8.25 percent.

The dollar was on the front foot against major currencies a day after the Federal Reserve said the U.S. economy had overcome a first-quarter slowdown and was "expanding moderately", leaving the door open for a rate rise in September.

"The FOMC (Federal Open Market Committee) builds the impression that the local currency will be forced even weaker in future," Tradition Analytics said in a currency note.

- Reuters