The rand, banking index drop sharply following Gordhan's axing
Last week, the local currency fell around 6% after Pravin Gordhan was ordered back from an overseas roadshow and then fired as Finance Minister.
JOHANNESBURG - The rand has continued to react to the developments, falling around 1.5% to two-month lows on fears of a rating downgrade.
Last week, the local currency fell around 6% after Pravin Gordha n was summoned from an overseas roadshow and then fired as Finance Minister.
The rand and banking index have dropped sharply so far on Monday with fears that ratings agencies may downgrade the country.
The banking index has already lost around 2% to the rand extending its losses. The local currency has been trading at around R13.60 to the US dollar, a fall from R12.30 a week ago.
Economists are also questioning the credentials of Pravin Gordhan’s replacement Malusi Gigaba as Finance Minister.
They argue that the rand could continue to fall while bonds have also extended their losses. The major banks have all be trading lower on the JSE on Monday.
(Edited by Refilwe Thobega)