A sharp jump in interest rates has stemmed a hefty loss of value in South Africa's currency.

But speculators, who savaged Asia last year and decided it was now Africa's turn, still seemed to have the upper hand.

The rand crashed through the six to the dollar and 10 to sterling pound levels at the open of a third straight day of all-out assault on the currency.

Against the US currency, the rand has fallen 26 per cent since the end of last year, half of that since Thursday alone.

The headlong slide halted at 6.1550. A rise of almost two percentage points in the official "repo" interest rate, meaning better relative returns on rand deposits, helped it claw back lost ground and rally to hover around six rand.

But the repo rise prompted First National Bank, one of South Africa's big four commercial banks, to hike its prime lending rate by two percentage points to 22.25, a development that economists had said would further dent growth prospects.

A cloud of depression, which formed when the markets and currency first came under heavy pressure a month ago, thickened.

Stocks and bonds took the currency's travails badly, sinking further in the late afternoon after a mid-day breather.

The All-Share index lost 1.54 per cent, closing at 6,768.2.

In late April, at a time of confidence hard to imagine two months later, the index soared to an all-time high of 8,358.7.

Banking shares fared worst yesterday, losing nearly 4 per cent, amid fears that higher rates meant tighter margins and lower profits.

Bond yields drifted sharply higher, signalling expectations that interest rates - one of the central Reserve Bank's limited ways to defend its currency - could be forced up again.

South Africa's markets have been battered in a month-long assault on emerging markets which has made the currency an easy target for foreign speculators.