The rand was relatively steady and well contained on Tuesday morning amid uncertainty about the future of President Jacob Zuma.
The long meeting of the ANC’s national executive committee (NEC), which was meant to finalise Zuma’s departure, left the markets none the wiser, fuelling speculation that Zuma was digging in his heels. The developments came after ANC president Cyril Ramaphosa indicated at the weekend that the matter would be resolved during the ANC’s NEC meeting.
“From a macro standpoint, while a Ramaphosa presidency will significantly boost sentiment towards SA, we think that some of the early optimism has gone too far,” said Neil Shearing, chief emerging markets economist at Capital Economics.
Shearing said Ramaphosa would have his work cut out for him, trying to balance the demands for a full inquest into Zuma’s alleged misdeeds with the need to keep his fractious party together in the run-up general elections in 2018.
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. Zuma’s tenure has been marred by controversy, which cost the party at least three big metros during the 2016 municipal elections.
At 9.05am, the rand was at R11.9468 to the dollar from R11.9232, at R14.7178 to the euro from R14.6508, and at R16.5466 to the pound from R16.5087. The euro was at $1.2319 from $1.2291. – BusinessLive