The rand slumped the most in four days as concern deepened central banks will take further steps to curb inflation and talks between North and South Korea stalled, leading investors to shun emerging-market assets. The currency of Africa’s biggest economy depreciated as much as 1 percent and weakened 0.8 percent at 7.2337 per dollar by 12:07 p.m. from a close of 7.1738 yesterday, extending its decline this year to 8.4 percent and making it the worst performer versus the dollar among more than 20 emerging-market currencies tracked by Bloomberg. North Korean military officials walked out of the first talks with South Korea in four months without an agreement on when to hold higher-level discussions aimed at defusing tensions on the peninsula, and Danish lender Amargerbanken A/S’s Feb. 6 failure sparked concern the economic recovery may falter. China raised lending and deposit rates yesterday for a third time since mid-October, and Indonesia increased borrowing costs for the first time in two years last week. “There seems to be heightening in tensions in Korea and more focus on the Danish bank that went under,” Ian Martin, a currency strategist at Johannesburg-based Rand Merchant Bank, said by telephone. “The market is thin and directionless and we expect the rand to trade on the 7.20-7.27 range to the dollar.” Bonds snapped two days of gains, with the 13.5 percent security due September 2015 falling 7 cents to 121.376 rand. That raised the yield by 1 basis point to 7.86 percent. The 10.5 percent note due December 2026 fell 27 cents to 115.62, boosting the yield by 3 basis points to 8.67 percent. Rate Increases South African bonds suffered their biggest monthly decline in almost two years in January as investors bet the yields of other nations would rise faster than in Africa’s biggest economy. China lifted its one-year deposit rate by a quarter of a percentage point to 3 percent, effective today, increased the one-year lending rate to 6.06 percent from 5.81 percent. To contact the reporter on this story: Ana Monteiro in Johannesburg at amonteiro4@bloomberg.net To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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