JOHANNESBURG: South Africa's rand extended its losses against the dollar on Tuesday as jittery investors sold the currency after a recommendation by the anti-graft watchdog to remove the central bank's mandate of maintaining currency and price stability.
At 1511 GMT, the rand traded at 13.0900 per dollar, 0.75 percent weaker than its New York close on Monday.
The unit fell as much as 1.6 percent against the dollar on Monday when Public Protector Busisiwe Mkhwebane, head of South Africa's constitutionally-sanctioned anti-graft watchdog, said the South African Reserve Bank should be more concerned about citizens and less about the currency.
"What really concerned the market is that the report seems to be an attack on an institution that is sacrosanct in the eyes of foreign investors," Standard Bank chief currency trader Warrick Butler wrote in a note.
S&P Global Ratings said South Africa's rating could be cut deeper into junk territory if the government meddles with the central bank's "critical" independence.
In fixed income, the yield for the benchmark government bond due in 2026 was down 0.5 basis points to 8.54 percent.
Stocks weakened on the bourse, weighed down by resource shares that have fallen since the government raised the minimum threshold for black ownership of mining companies to 30 percent from 26 percent last Thursday.
The Chamber of Mines, which represents mining firms, said it would challenge the new rules in court, while ratings firm Fitch said the new regulations will deter investment.
"There is a lot of nervousness around it, nobody likes uncertainty, markets hate that," said Independent Securities trader Ryan Woods.
Harmony Gold weakened 6 percent to 21 rand and Impala Platinum also fell 6 percent to 34 rand. Anglo American fell 3 percent to 159 rand.
The Johannesburg All-share index fell 0.9 percent to 51,161 points, while the benchmark Top-40 index weakened 0.91 percent to 44,970 points.
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