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Economists warn rand could slip further following Gordhan sacking

The local currency lost around 6% on Friday after Finance Minister Pravin Gordhan was fired.

FILE: South African rand.  Picture: Christa Eybers/EWN

JOHANNESBURG – Currency traders have been cautioned that the rand may come under further pressure as the political battle continues over the future of President Jacob Zuma.

Opposition parties have called for the president to step down while members of the African National Congress (ANC) have voiced their concerns at the reshuffle.

The local currency lost around 6% on Friday after Finance Minister Pravin Gordhan was fired.

The rand traded at around R12.30 to the dollar last Monday before Gordhan was told to return home during an international investor road show.

As the week progressed and Zuma then reshuffled his Cabinet, the rand weakened to around R13.40.

Nedbank economist Isaac Matshego has warned that the rand could slip further.

“The chance of Minister Pravin Gordhan being removed from his position had been there because we know for a couple of months there had been a threat that he would be removed.”

But he has warned that further political uncertainty will weigh heavily on the rand, saying that more heated reaction is expected to the reshuffle.

(Edited by Leeto M Khoza)