The South African rand plunged to become the world's worst-performing currency of the day after the South African Reserve Bank (SARB) surprised markets by holding interest rates steady.
The decision came despite widespread expectations for a 25-basis-point increase, as the Monetary Policy Committee prioritized economic growth support over tightening policy.
In its statement, the SARB also revised its inflation forecasts lower, signaling a shift in its assessment of domestic price pressures.
The central bank's six-member committee cited the need to bolster economic activity as the primary rationale for maintaining the current policy stance, a move that immediately triggered sharp selling in the local currency.
The rand's decline reflects investor disappointment with the lack of hawkish action.
With the currency already showing little directional conviction in early trade—hovering around 16.3850 against the U.S. dollar on Wednesday and 16.5775 on Thursday—the rate hold removed a key potential support for the currency.