South Africa's rand slides as Greek fears weigh on EM currencies

May 11, 2015 2:36 PM

JOHANNESBURG (Reuters) - South Africa's rand fell more than 1 percent against the dollar on Monday, tracking a downward slide in emerging markets after investors were spooked by fears that Greece could default on its debt.

South African bank notes featuring images of former South African President Nelson Mandela (R) are displayed next to the American dollar notes in this photo illustration in Johannesburg August 13 2014. REUTERS/Siphiwe Sibeko

A rate cut in China, the world's second largest economy, also dampened appetite for commodity currencies like the rand, analysts said.

The rand hit a session low of 12.0585 to the greenback, and was trading at 12.0525 by 1518 GMT, down 1.06 percent from Friday's close.

"Weakness is widespread across the EMEA region on the back of Greek concerns ahead of a scheduled payment to the IMF tomorrow (Tuesday)," Tradition Analytics said in a report.

The rand's move largely mirrored a weaker euro as investors fretted about a possible Greek exit from the eurozone.

On the local front, power utility Eskom said it would slash up to 1,000 megawatts from the grid as it grapples with the worst supply shortages since 2008, casting a pall on the domestic economic outlook.

Government bonds had a less torrid session than the rand, with the yield on the benchmark instrument maturing in 2026 ending unchanged at 8.09 percent.