The South African rate hike isn’t working

South Africa’s central bank lifted its benchmark interest rate by 0.5 percentage point to 5.5 per cent as concerns over the wilting currency outweighed the weakness of the local economy, but it proved insufficient to impress currency markets.

The South African rand jumped around during the presentation of the rate announcement, but eventually slumped to 11.339 against the US dollar, down 2.7 per cent in the day as investors were unimpressed by the tentative nature of the increase.

The decline was mirrored in other currencies, with the Turkish lira slumping 1.6 per cent after an early day gain of as much as 3 per cent.

There is more from the FT here, more in general here, where you also will see reports that the positive impact of the Turkish rate hike is falling fast.