The rand slumped more than 3% on Wednesday over renewed uncertainty over South Africa's land reform plan and a Moody's warning on the country's fiscal deficit.

"The rand is under massive pressure on renewed speculation regarding land reform and the implementations thereof. In an already risk-averse market, this only adds to the negative sentiment," said TreasuryONE in a snapnote.

The rand reacted badly to the speculation. On top of that Moody's Investor Services warned that the pace of SA's fiscal consolidation will be slower than government forecasts as weaker-than-expected economic growth and a rising public sector wage bill act as fiscal headwinds.

Moody's, however, said that, despite the slower pace of fiscal consolidation, medium-term deficit targets remain within reach and, if met, will support a stabilisation of debt levels and reinforce its assessment of South Africa's fiscal and institutional strengths.

By 13:30 the rand was trading 3.35% weaker at R14.72 against the US dollar, bringing its loss this month to almost 10%.

Meanwhile, the Automobile Association (AA) said on Wednesday that it expects the substantial rand weakness could undo recent fuel price stability.

The rand, along with other emerging market peers, took a beating on Monday, reaching an intra-day low of R15.70/$, amid a meltdown in the Turkish lira.

In its report, "Government of South Africa: Fiscal slippages likely this year, but medium-term targets remain within reach", Moody's said it expects growth this year 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".

Moody's expects a fiscal deficit of around 4.0% of gross domestic product (GDP) in 2018/2019, implying a 0.4 percentage point of GDP shortfall from government targets.

However, Moody's expects the government to hit its 3.5% fiscal deficit target by 2020/2021, with debt likely to stabilise at around 56% of GDP.

Meanwhile, ANC chairperson Gwede Mantashe told News24 in an exclusive interview that the Constitution must be amended to limit land ownership to 12 000 hectares per farm owner, and white farmers who own more than that should hand over the rest to the state without compensation.

"You shouldn’t own more than 12 000 hectares of land and, therefore, if you own more, it should be taken without compensation," he said.

He is the first ANC leader to give some detail on how exactly the December conference resolution on expropriation of land without compensation could be implemented.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER