OREANDA-NEWS. March 20, 2015. South Africa's rand fell sharply on Thursday, surrendering most of the gains made in the previous session when the US Federal Reserve dampened expectations of an imminent interest rate increase.

By 1507 GMT the rand had weakened 1.67 percent to 12.2800 , breaching the 12/\\$ level for the first time in two weeks.

The local unit gained as much as 3 percent overnight after the Fed downgraded its views on the US economy and signalled a more gradual approach to monetary tightening.

The rand, which is one of the more volatile emerging currencies due to thin liquidity, tracked its peers lower as brief rallies fizzled out.

By 1507 GMT, Russia's rouble had slipped over 1 percent after climbing to 2-1/2 month high, while the Turkish lira softened over 1 percent after gaining 1.5 percent.

"The weaker rand is a function of EM markets still being under pressure," said Dale Forssman, a trader at World Wide Capital Securities.

"Guys were seeing a good opportunity to sell the rand into this little bit of strength and dollar weakness, but the dollar has made up most of what it lost overnight," Forssman added. Government bonds were firmer, with the benchmark instrument due in 2026 shedding 11.5 basis points to 7.78 percent.