Rand hits 7-month low as Marcus signals exit
Marcus gave no clues about her successor but said Zuma would be able to draw on a “strong talent pool”.
JOHANNESBURG - The rand weakened against the dollar on Thursday, falling to a seven-month low after respected Reserve Bank Governor Gill Marcus said she would not renew her contract when her five-year term ends in November.
Government bonds weakened alongside the currency, pushing yields higher, after Marcus left the benchmark repo rate unchanged at 5.75 percent at the bank's penultimate policy meeting of the year.
She cited a weak growth outlook as the basis for her decision.
The yield on the benchmark 2026 government bond rose to a session high of 8.245 percent, and closed 5 basis points higher on the day at 8.24 percent.
The rand fell to 11.1095/dollar after Marcus's announcement, its softest level since late February, before clawing back to 11.0675 by 1548 GMT, down 0.3 percent from its previous close.
"Dollar-rand moved higher as a knee-jerk response, reflecting the esteem in which Governor Marcus is held by the markets, and investors' belief in her anti-inflation credibility," Standard Bank analyst Razia Khan said.
The appointment of an insider as successor would be the most rand-friendly option, Khan added.
Marcus, who has guided Africa's most advanced economy through five years of post-financial crisis turbulence, gave no clues about her successor but said President Jacob Zuma would be able to draw on a "strong talent pool" at the bank.