South Africa's declaration of a state of emergency today sent its currency, the rand, plunging to 35.55 cents -- less than 1 cent above the record low it reached last August before the government froze foreign-debt repayments and imposed foreign-exchange controls.

The value of the nation's currency has plunged 17 percent since June 1 as racial tensions have heightened.

The value of the currency outside the country, which is quoted separately, fell to an unprecedented 19.88 cents, creating a massive 44 percent margin between the two, which economists regard as an index of the perceived risk of investing in South Africa.

The rand's second slump in nine months began three weeks ago as world reaction to South Africa's raids on three neighboring black states on May 19 increased fears of economic sanctions.

Business sources report a flight of capital as international companies, fearing that Pretoria may respond to sanctions by blocking all assets inside the country, are moving out goods and cash in what one described as "piecemeal disinvestment."

The rand fell below 40 cents last week for the first time since September, when the government imposed its debt freeze and split the currency into domestic and external valuations, called the "commercial" and "financial" rands, to control the outflow of foreign investment.

With the two-tier system, a foreign investor who wants to withdraw from South Africa only can take money out of the country at the lower "financial" rand rate. Conversely, companies wishing to invest in the country can buy the cheaper rands to spend here.

The two-rand system is meant to discourage disinvestment and make it easier for South Africa to support the commercial rand, which is cushioned against external market pressures.

Two months ago, the rand appeared to be stabilizing as a result of these measures, particularly after an agreement negotiated by a Swiss banker, Fritz Leutwiler, which rescheduled the repayment of South Africa's $14 billion of frozen debts.

The first repayment was made in mid-April, and the domestic, or commercial, rand rose to 50 cents from the low point of 34.75 cents it had reached when the freeze was imposed.

The financial, or external, rand then was 37 cents, giving a margin of 26 percent, which reflected what economists described as a "restabilizing" of investor confidence. But it was still a long way from the $1.30 to $1.40 at which the rand traded a few years ago before the South Africa became engulfed in racial conflict over its segregationist system.

Now, as one analyst put it here, "The bottom has dropped out again." The rand has fallen more than 10 cents in three weeks, wiping out most of the recovery, and predictions are that it will fall further.

The first sudden collapse of the rand occurred when a hard-line speech by President Pieter W. Botha shattered hopes that he was going to announce major reforms to the apartheid system of segregation. The speech caused international bankers, particularly in the United States, to refuse to extend deadlines for repayment of South Africa's $14 billion of short-term loans.

Chief among the reasons analysts give for the rand's second plunge is a sense that international sanctions against the government are now inevitable. That view follows South Africa's raids into Zimbabwe, Botswana and Zambia on May 19, and Pretoria's increasingly hardline attitude toward negotiating with black nationalists.

This has been underscored by a new sanctions bill introduced in Congress in Washington two weeks ago, the decision last weekend by the Commonwealth group of "Eminent Persons" to end its attempts at mediation and recommend that the 49 Commonwealth nations consider imposing sanctions, and reports that Norway and Japan are considering trade restrictions.

A mood of alarm has gripped the public as well as big business. When a popular automobile-insurance company, AA Mutual, went bankrupt last week, announcing that its policies were no longer valid, it triggered the first panic-run on a bank that South Africa has ever experienced.

Thousands of people mistook AA Mutual for another insurance company called Old Mutual, which Nedbank, one of South Africa's biggest, had just granted a large loan. Thinking Nedbank was in trouble, they rushed to withdraw their money, forcing branches around the country to close and the Reserve Bank to come to Nedbank's aid.

"Nothing could be more indicative of the condition of the country than this sudden rush to withdraw funds from a bank that . . . is known to be sound," said an editorial in Business Day, the country's leading financial daily.

"Not since the Thirties has confidence in the government's ability to manage the country or the economy been lower than it is today," the paper added.

Deepening the uncertainty has been the prospect of increased violence during the 10th anniversary of the Soweto uprising on June 16, with the government prohibiting all commemorative meetings and black activist organizations declaring their determination to go ahead with them.

Finally, South Africa's central bank, the Reserve Bank, appears to lack the dollars to prop up the rand, either because it is having to pay off more debts than expected or because there is a flight of capital.

"Even allowing for the massive deterioration in the confidence factor, the figures just don't add up," said Howard Preece, a leading financial commentator.

He pointed out that South Africa should have had a capital outflow this year of no more than $2.2 billion, which would be covered by a balance-of-payments surplus slightly bigger than that.

The fact that the Reserve Bank appears to be short of dollars to support the rand suggests either that more than the expected $2.2 billion has had to be paid, or that dollars have been lost as capital is removed from the country, Preece says.

"With attitudes abroad getting tougher, it may be that some private-sector loans that were expected to be rolled over have also been called up," he said.

"But leakage is the real explanation," Preece added. "International companies are moving out capital in what amounts to a disguised transfer of costs. Privately, everybody knows it is happening, even the Reserve Bank, but nobody talks about it in public."

According to Preece, a local subsidiary buying materials from its parent company in, say, Britain or the United States, will pay 50 percent more than the goods are actually worth, thus transferring some of the subsidiary's capital.

An additional advantage of this "double invoicing," as it is called, is that the disguised capital transfer takes place at the commercial-rand exchange rate, instead of the lower financial-rand rate that the foreign company would get if it sold its assets to a South African buyer.

"The multinationals are doing a lot of this right now because they fear that, if sanctions come, the government will respond by blocking all assets here and resorting to a siege economy," Preece said.

Ken Mayson, director of the American Chamber of Commerce, an association of 300 U.S. companies operating here, said he is aware of this being done. International companies also are transferring capital goods in much the same way, according to Mayson.

"It is a form of asset stripping. You could call it piecemeal disinvestment," Mayson said. According to Mayson, 44 U.S. companies had quit South Africa during the past three years.

He said most had left for economic reasons rather than in response to pressure for disinvestment and that their departure "hasn't impacted violently" on the South African economy.

"The vacuum left is very quickly filled by Japanese and British companies," Mayson added.