South Africa’s rand slumped on Wednesday as ratings agency Moody’s warned that the pace of fiscal consolidation in Africa’s most industrialised economy had slowed.

Moody’s is the only one of the “big three” ratings agencies which still has South Africa’s sovereign rating in investment grade, so any hint that the agency could lower that rating easily unsettles financial markets.

Traders said the rand was also hurt by a resurgent US dollar, which struck a 13-month peak earlier in the day, and by comments from a top official in South Africa’s ruling African National Congress (ANC) about expropriating land from white farmers.

At 1135 GMT, the rand was more than 3% weaker at 14.6975 versus the dollar. It is down more than 8% in the past week after being rattled by turmoil on Turkish financial markets, which triggered broad emerging market sell-off.

South African government bonds were also weaker, with the yield on the benchmark bond maturing in 2026 up 11.5 basis points at 9.060%.

“We expect a slower pace of fiscal consolidation than the government of South Africa is forecasting,” Lucie Villa, a Moody’s vice president, said in the ratings agency’s report.

“Growth this year is expected to be lower than the government’s own estimates, weighing on tax revenues, while the public sector wage agreement in June also brings extra, unbudgeted costs,” Villa added.

“It’s mainly the Moody’s comments which have sent the rand weaker,” said Jan Sluis-Cremer, a forex dealer at Rand Merchant Bank.

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