The rand weakened in early trade on Thursday, as markets digested the US Federal Reserve’s decision to raise interest rates while striking a less hawkish tone regarding future hikes.

At 0650 GMT, the rand traded at R15.57 against the dollar, around 0.8% weaker than its previous close.

The US Federal Reserve raised rates by an expected 50 basis points, with its Chair Jerome Powell ruling out large, aggressive interest rate hikes for the year as the central bank seeks to contain inflation without triggering an economic recession.

Higher rates in developed markets tend to drain capital from riskier emerging markets such as South Africa, weighing on their currencies.

At home, continued power cuts also depressed sentiment.

State power utility Eskom was implementing another round of rotational power cuts for a third day after breakdowns at generating units. The power cuts have sapped South Africa’s economic growth in recent years.

In fixed income, the yield on the benchmark government bond maturing in 2030 was down 5 basis points at 9.845%.