Rand steady as Jacob Zuma seemingly refuses to leave office

The rand was largely unchanged at midday on Tuesday‚ amid reports that ANC secretary-general Ace Magashule had handed a letter of recall from the ANC to President Jacob Zuma at his official residence in Pretoria.

Zuma has seemingly rejected the call to vacate his office.

The ANC has called a media conference at 2pm‚ in which the party is set to provide further detail on the negotiations held with Zuma over the past week. The national executive committee (NEC) has voted for his recall‚ according to reports.

The focus has now shifted to a probable motion of no confidence against Zuma in Parliament on Wednesday‚ with the ANC caucus already summoned.

At 11.30am the rand was at R11.9197 to the dollar from R11.9232‚ at R14.6927 to the euro from R14.6508‚ and at R16.5607 to the pound from R16.5087.

The euro was at $1.2327 from $1.2291.

“An early Zuma exit this week could see the rand strengthen to R11.70‚ and then move towards R11‚ provided that ANC president Cyril Ramaphosa can assume the presidency of SA‚” said Investec chief economist Annabel Bishop.

While SA’s outlook looks brighter than it did several weeks ago‚ many hurdles still needed to be overcome‚ she said.

“These include funding and governance of state-owned enterprises other than Eskom‚ the extreme expenditure pressure on public finances‚ which has resulted in over borrowing‚ and credit rating downgrades as SA now faced full subinvestment grade status.”

The rand has gained materially against the dollar since December when Ramaphosa was elected as the ANC’s new leader‚ boosted in part by a steady rise in equity inflows.

By Maarten Mittner -BusinessLIVE

Source: TMG Digital.

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