Economists concerned rand losses will continue following Gordhan call back

The banking index lost more than 3% on the JSE on Monday, a scene similar to when Finance Minister Nhlanhla Nene was sacked in December 2015.

FILE: Finance Minister Pravin Gordhan engaging with clients in a Q&A session at consulting firm Deloitte's office. Picture: Twitter/@DeloitteSA.

JOHANNESBURG - As Finance Minister Pravin Gordhan returns to the country following an instruction from President Jacob Zuma, economists are concerned that the rand will continue to lose ground.

The local currency lost around 3% on Monday after a statement from the Presidency that Gordhan and his deputy were being asked to return.

The banking index lost more than 3% on the JSE on Monday, a scene similar to when then Finance Minister Nhlanhla Nene was sacked in December 2015.

Nedbank economist Isaac Matshego says this latest move has created uncertainty.

“There’s been a negative response to this announcement and we’re worried as we don’t know what this means.”

Investment Solutions Lesiba Mothata says the country’s economy has been promising.

“South Africa was well on its way from an outlook that was negative pushed to stable outlook.”

Prior to the announcement by President Zuma on Monday, the rand had been trading at levels last seen in June 2015.

(Edited by Zamangwane Shange)