The local currency is reeling from the renewed fear a Cabinet reshuffle‚ which could involve Pravin Gordhan being ousted as finance minister.
On Monday President Jacob Zuma recalled Gordhan and his deputy‚ Mcebisi Jonas‚ from an overseas investor trip‚ without giving reasons.
“This move by [Zuma] is now reviving talk of a Cabinet reshuffle‚ unnerving investors who see Gordhan as an emblem of stability‚” NKC Research analysts said in a note.
“Some pundits say Gordhan is the target of political pressure from a faction allied to Zuma‚ which has criticised his plans to rein in government spending as the economy stagnates.”
The sharply weaker rand stokes inflation and could sway the tone of the Reserve Bank’s monetary policy committee when it delivers its decision on interest rates.
Before the latest political ructions‚ which have drawn stinging criticism from the business community‚ some analysts had expected a possible cut in rates later in the year‚ owing to rand stability and a benign inflation outlook.
“Gordhan’s departure would increase the risk that the required structural reforms will not be implemented and the commitment to maintain spending in check may weaken‚ which could lead to ratings agencies downgrading SA to junk‚” said Piotr Matys‚ analyst at Rabobank International.
At 9.13am the rand was at R12.9751 to the dollar from a previous close of R12.7616. It was at R14.0955 against the euro from R13.8647 and at R16.3217 against the pound from R16.0221.
The euro was at $1.0863 from $1.0864.
-TMG Digital
Rand loses another 2%‚ briefly breaches R13/$ mark
The local currency is reeling from the renewed fear a Cabinet reshuffle‚ which could involve Pravin Gordhan being ousted as finance minister.
On Monday President Jacob Zuma recalled Gordhan and his deputy‚ Mcebisi Jonas‚ from an overseas investor trip‚ without giving reasons.
“This move by [Zuma] is now reviving talk of a Cabinet reshuffle‚ unnerving investors who see Gordhan as an emblem of stability‚” NKC Research analysts said in a note.
“Some pundits say Gordhan is the target of political pressure from a faction allied to Zuma‚ which has criticised his plans to rein in government spending as the economy stagnates.”
The sharply weaker rand stokes inflation and could sway the tone of the Reserve Bank’s monetary policy committee when it delivers its decision on interest rates.
Before the latest political ructions‚ which have drawn stinging criticism from the business community‚ some analysts had expected a possible cut in rates later in the year‚ owing to rand stability and a benign inflation outlook.
“Gordhan’s departure would increase the risk that the required structural reforms will not be implemented and the commitment to maintain spending in check may weaken‚ which could lead to ratings agencies downgrading SA to junk‚” said Piotr Matys‚ analyst at Rabobank International.
At 9.13am the rand was at R12.9751 to the dollar from a previous close of R12.7616. It was at R14.0955 against the euro from R13.8647 and at R16.3217 against the pound from R16.0221.
The euro was at $1.0863 from $1.0864.
-TMG Digital
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