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The rouble plunged around 30% on Monday, the euro slid almost 1% versus the dollar, and the safe-haven Swiss franc and Japanese yen were in demand after Western nations imposed tough new sanctions on Russia for its invasion of Ukraine.
The rand has weakened by almost a percent to R15.43/$ by Monday midday.
Western allies have ramped up efforts to punish Russia with new sanctions including cutting some of its banks off the SWIFT financial network and limiting Moscow's ability to deploy its $630 billion foreign reserves and shuttering their airspace to Russian aircraft. Companies also reported divestment plans.
Adding to market nerves, Russian President Vladimir Putin put Russia's "deterrence forces" - which wield nuclear weapons - on high alert.
The rouble sank to a record low, dropping as far as 120 per dollar as those measures are expected to pulverise the country's economy and prevent the Central Bank of Russia (CBR) from using its foreign reserves for outright FX interventions, analysts said.
"Freezing central bank assets will largely cut off the CBR from access to its EUR and USD reserves, which in total comprise approximately 50% of its total foreign reserves," said Kristoffer Kjær Lomholt, chief analyst at Danske Bank.
The rouble was down 30% at 109 per dollar at 09:00 GMT, even after Russia's central bank on Monday sharply raised its key policy rate to 20% from 9.5%, a day after announcing a slew of measures to support domestic markets.
The euro meanwhile dropped 0.8% to $1.11745 against the dollar and to 129.2 against the yen. It was down 0.9% against the Swiss franc.
A dollar rally eased, with the greenback flattening at 97.128 against a basket of peers.
Overall across FX markets volatility has soared, with one commonly followed measure hitting its highest since December 2020.
Other European currencies also fell sharply versus the dollar. The Swedish crown dropped 1.7% to 9.5360 crowns and Norway's crown fell 1% to 8.9090 crowns.
Markets are now pricing in a 90% chance the U.S. Federal Reserve will hike rates by 25 basis points at its March meeting, according to CME's Fedwatch tool, as the invasion put an end to speculation that the Fed will jump in with a 50 bps hike.
Investors also scaled back their bets for European Central Bank rate hikes in 2022.
