South African Rand in Fresh Tumble as ANC Get Behind Zuma
- Written by: Gary Howes
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The South African Rand has plummeted in mid-week trade on news the ruling ANZ party has confirmed it stands 100% behind President Jacob Zuma.
Markets have taken the latest show of support for Zuma as a sign that the President’s perceived market-negative and increasingly populist agenda will face little resistance going forward.
The Pound to Rand exchange rate has surged 2% to reach 17.25 - levels last seen in December 2016, taking the advance over the past month-to-date to near on 8%.
The USD/ZAR rate is at 13.80 and fast closing in on that target of 14.00 that we have been talking about.
ANC secretary-general Gwede Mantashe told a press conference mid-week that “public dissonance on the matter was a mistake that should not be committed again”.
Mantashe said the ANC accepted the “irretrievable breakdown of the relationship” between Zuma and Gordhan as sufficient reason for his departure, and has “full confidence in the newly appointed minister of finance”.
Investors saw the only realistic chances for Zuma’s demise as coming from within the ANC itself and have interpreted the latest developments as confirming the President might actually emerge from this incident stronger than before within the ruling party.
