Rand Falls as Investors Shun South African Bonds

The South African rand dropped today as the optimism about the European banking system quickly waned, spurring investors to draw money out of riskier assets.

The global funds sold $1.4 billion of South African bonds on September 13 and 14. That’s the biggest two-day selling since October 2008. Economists are concerned that the selling can lead to higher current account deficit in South Africa as the current account was finance for the most part by the bonds inflows.

USD/ZAR rose from 7.376 to 7.3830 today as of 13:20 GMT. Today’s low was 7.3440 and high was 7.431.

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