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Rand falls on Ramaphosa crisis

December 01, 2022

The rand weakened on Thursday afternoon trade as market analysts digested the news that President Cyril Ramaphosa may be impeached following a panel of experts’ findings against him.

The rand was down 3.16% to R17.71 to $1 at 1300 GMT, its worst day since early May.

South Africa’s presidency will make an announcement imminently, President Cyril Ramaphosa’s spokesman said on Thursday, a day after a panel report found preliminary evidence that he may have violated his oath of office and committed misconduct.

The president has denied any wrongdoing. Ramaphosa has not been charged with any crimes.

“The uncertainty around Ramaphosa’s presidency has caused a selloff of the local currency as investors now wait for clarity on the ramifications of the report, and what that could mean for the President,” said Bianca Botes, director at Citadel Global.

The growing uncertainty around his political future will weigh negatively on sentiment, said Barclays in a note, adding that it could slow the “positive momentum” that South African credit spreads have enjoyed.

The yield on South Africa’s benchmark 10-year local bond was up 62.5 basis points to 10.91%, the biggest move since the March 2020 Covid-19 induced market rout.

South Africa’s sovereign dollar-denominated bonds dropped around 2 cents. Longer-dated maturities suffered the biggest losses with the 2052 down 2.4 cents to trade at 85.917 cents in the dollar, Tradeweb data showed.

The Johannesburg Stock Exchange pared gains, with the all-share index up 0.26% to 75,021.61 points, having risen as high as 76 338 points earlier on Thursday.-moneyweb


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Last modified on Thursday, 01 December 2022 17:50