Rand continues to plummet following Cabinet reshuffle
It’s fallen to its weakest level against the dollar since the 10th of this month.
JOHANNESBURG – The rand has extended its decline on the back of President Jacob Zuma's Cabinet shake-up.
It’s fallen to its weakest level against the dollar since the 10th of this month. At 7am the currency was trading at R13.57 to the greenback.
The removal of Pravin Gordhan and Mcebisi Jonas from the Treasury has raised concerns South African will not be able maintain the momentum needed to boost economic growth levels.
The rand's movement suggests Malusi Gigaba and Sfiso Buthelezi, who are replacing Gordhan and Jonas, will face a tough task convincing investors and the market at large of their ability to steer the economy through tough times.
The rand's weakening this week is the most severe percentage drop since the currency's downward movement when Nhlanhla Nene was removed as Finance minister in December 2015.
At 6pm on Thursday, the rand was trading at R12.81 to the dollar, this was shortly before President Jacob Zuma was due to meet the other five members of the ANC’s top six.
By 10:26pm, the currency had weakened to R13.27, before dropping further to R13.35 at 11:28pm.
The rand rose to a session high of R12.82 after Reuters exclusively reported that Zuma is considering offering to step down next year, at least 12 months before his term as South African president ends.
Bonds reached their firmest since Monday, with the yield on benchmark paper due in 2026 falling 12 basis points to 8.595%.
Inflation slowed to 6.3% in February from 6.6% the previous month, while the current account deficit narrowed to near a six-year low, giving policymakers room to consider a rate cut to buoy the ailing economy.