South African currency affects local politics

As the rand weakened against the dollar at the beginning of this week, political uncertainty rises after President Jacob Zuma was asked to resign his position

The SA rand was trading at 14.7350 per dollar this week, which translates into a 0.31 per cent decrease when compared to last Friday.

Moreover, stocks rose due to decreasing interest rates applied by the Federal Reserve.

Analysts Mohammed Nalla and Reezwana Sumad from the Nedbank Capital explain:

“The rand has managed to hold below the 15.0000 level, but the price action would suggest that it remains vulnerable to any headlines, this as the local political situation remains unpredictable.”

The situation raised speculations about President Jacob Zuma. Experts expect the President to quit after the court ruling fallout. Nevertheless, the African National Congress (ANC) stated on Monday it will support the President. A motion debate is scheduled for this afternoon among the parliament members aiming to address the impeachment vote.

In stock terms, the current benchmark Top-40 index went up by 0.6 per cent and closed at 45,772.49 points, while the All-share index registered the same increase in percentage and stopped at 51,895.14 points.

“Stocks are a little bit firmer, interest rates are not moving up in the short-term and it looks like investors are buying emerging stocks again,” Cratos Capital trader Greg Davies commented.

As a result, banks and retailers have gained minor percentages to their capital influx, fluctuating to a maximum of 3.51%. When compared to the same period last year, trade was also thin, with only 180 million exchanged shares.