Rand falls to 3½ year low

South Africa's rand fell more than 1.8 percent against the dollar on Wednesday, reaching its softest level in more than 3-1/2 years and breaching the key 9.0 level as a renewed attack on the euro fuelled risk aversion.

A depreciation in the weak rand will increase the price of petrol and food as well as other imported items.

Graphic: Renjith Krishnan.

The rand was at 8.9899 to the US dollar by 14:25 SA time, down from Tuesday's close at 8.83 and recording the steepest decline in a basket of 20 emerging market currencies monitored by Reuters.

Earlier in the day, the rand was softer due to negative global risk sentiment after the eurozone finance ministers failed to agree on a debt-reduction package for Greece.

SA’s consumer price index (CPI)‚ which the Reserve Bank uses to target inflation‚ increased by 5.6% year on year in October from 5.5% year on year in September‚ Statistics SA (Stats SA) said on Wednesday.

“The CPI figure had no direct influence on the rand because it was broadly in line with expectations‚” said Duncan Howes‚ currency trader at Absa Capital. - Reuters and I-Net Bridge