The rand was wobbly on Wednesday morning as markets awaited further developments around the future of Finance Minister Pravin Gordhan and his deputy‚ Mcebisi Jonas.
Speculation is rife that the two will be removed from their posts‚ although the timing of their removal and who will replace them remains unclear at this stage.
The resulting uncertainty has hit sentiment‚ pushing the rand down 5% against the dollar over the past two days‚ marking a sharp U-turn from its the strengthening path it has been on in recent weeks.
Zuma's move against Gordhan adds R2.6bn to government debtThe rand was hovering around R13/$ on Wednesday morning as the market waited to see how the drama between President Jacob Zuma and Finance Minister Pravin Gordhan would play out.
On Monday the local currency looked like it would push through R12.30/$ but then political developments pushed it to lows of R12.10/par “Risks are still skewed towards ongoing weakness but this would require further negative news flow. Absent further shock‚ the market would normally consolidate and start to recover‚” Rand Merchant Bank (RMB) analyst John Cairns said in a note.
The speculation of a cabinet reshuffle follows President Jacob Zuma’s instruction on Monday to Gordhan and Jonas to cancel overseas investor trips.
At 9.26am the rand was at R13.1030 to the dollar from a previous close of R12.9901 It was at R14.1368 against the euro from R14.0450 and at R16.2559 against the pound from R16.1744.
The euro was at $1.0789 from $1.0812.
Rand under pressure as speculation of cabinet shake-up mounts
The rand was wobbly on Wednesday morning as markets awaited further developments around the future of Finance Minister Pravin Gordhan and his deputy‚ Mcebisi Jonas.
Speculation is rife that the two will be removed from their posts‚ although the timing of their removal and who will replace them remains unclear at this stage.
The resulting uncertainty has hit sentiment‚ pushing the rand down 5% against the dollar over the past two days‚ marking a sharp U-turn from its the strengthening path it has been on in recent weeks.
On Monday the local currency looked like it would push through R12.30/$ but then political developments pushed it to lows of R12.10/par “Risks are still skewed towards ongoing weakness but this would require further negative news flow. Absent further shock‚ the market would normally consolidate and start to recover‚” Rand Merchant Bank (RMB) analyst John Cairns said in a note.
The speculation of a cabinet reshuffle follows President Jacob Zuma’s instruction on Monday to Gordhan and Jonas to cancel overseas investor trips.
At 9.26am the rand was at R13.1030 to the dollar from a previous close of R12.9901 It was at R14.1368 against the euro from R14.0450 and at R16.2559 against the pound from R16.1744.
The euro was at $1.0789 from $1.0812.
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