By Garth Theunissen Oct. 23 (Bloomberg) -- South Africa's rand traded near its weakest in 6 1/2 years against the dollar as commodity prices and stocks fell, stoking concern a global recession will hurt exports of precious metals and cut purchases of the nation's assets. The currency traded within 40 cents of its weakest level since March 2002, reached yesterday, as gold and platinum prices were near record lows and South Africa's benchmark equity index declined. The rand is suffering from a ``currency crisis'' as ``risk appetite'' wanes, Merrill Lynch & Co. strategist Benoit Anne said yesterday. The rand is down 28 percent this month. ``Investors are scaling back on their emerging-market exposures everywhere, which results in net outflows from South African equities,'' said Lucy Bethell, a currency strategist in London at Royal Bank of Scotland Group Plc. ``That makes it very difficult for South Africa to finance its current-account deficit, especially when coupled with the weakness in commodity prices.'' The rand traded at 11.5173 per dollar as of 12:13 p.m. in Johannesburg, from 11.5650 yesterday, when it fell as low as 11.8722, the lowest level since March 19, 2002. Against the euro, it was at 14.7820, 34 euro-cents off its weakest ever level of 15.2338, reached yesterday. Bethell said it was ``very difficult to call a top on dollar- rand'' as South Africa's currency had already fallen ``a lot further'' than she thought was justified. She declined to give a trading range for the rand but said it would ``continue to exhibit weakness'' until emerging-market currencies begin to recover in the second half of next year. Rand Plunge South Africa's currency has plunged 41 percent against the dollar and 33 percent against the euro in 2008 as foreigners turned net sellers of almost 41 billion rand ($3.6 billion) of the nation's assets, data from its stock and bond exchanges show. Gold fell as much as 2 percent to $715.63 an ounce, the lowest price in more than a year. Bullion has fallen almost 29 percent since March 17, when it reached a record high of $1,032.70 an ounce. Platinum, which competes with gold as South Africa's biggest export earner, fell as much as 6 percent to $794.05 an ounce, its weakest level since July 2004. South Africa produces almost 80 percent of the world's platinum and about 10 percent of its gold, typically causing the rand to trade in tandem with the metals' prices. South Africa's FTSE/JSE Africa All Share Index fell for a second day, losing 2.6 percent. The measure has slumped 32 percent this year as foreigners sold the nation's shares amid the world's worst financial crisis since the Great Depression. ``Until stability returns to the markets, there will be no stability in the rand,'' said Jim Bryson, head of foreign-exchange trading at Rand Merchant Bank in Johannesburg. ``It's not in our hands.'' Government bonds fell with the yield on the 13.5 percent security due September 2015 rising 11 basis points to 9.99 percent. The yield on the 13 percent note maturing in August 2010, which is more sensitive to interest-rate expectations, increased 22 basis points to 10.49 percent. Yields move inversely to bond prices. To contact the reporter on this story: Garth Theunissen in Johannesburg gtheunissen@bloomberg.net

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