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Cape Town - The rand was having a yo-yo session against the US dollar as it tested the R14.60-level on speculation that President Jacob Zuma would resign.
This did not realise and Zuma just confirmed that he didn't intend to violate the Constitution and that he was advised on wrong legal counsel.
The president said he will repay the funds for the non-security related upgrades to his Nkandla homestead, after which the rand exchange rate moved back to R14.70.
“Will wait to see what the ANC says at 20:00,” said TreasuryOne.
The rand strengthened to R14.60/$ shortly before the announcement and moved in a narrow band up to R14.68 during Zuma's address. By 19:48 the currency was trading at R14. 71 to the greenback.
On Thursday the Constitutional Court found that Zuma has violated the Constitution and that the Treasury must determine how much he should pay for the upgrades at his Nkandla mansion.
Zuma told the nation on Friday evening that he welcomed the judgment, adding that he respects the ConCourt’s ruling and will abide by it.
"It was never my intention not to abide by the Public Protector's remedial action."
He said the judgment has strengthened the countries constitutional democracy.
TreasuryOne said Zuma’s resignation would've been rand positive.
Nomura emerging markets economist Peter Attard Montalto said the markets have gotten overexcited about chances of Zuma leaving this week. “’Should’ is not the same as ‘will’ in SA politics.
“As expected Zuma has not resigned. We are in the ‘sorry’ scenario, though we still need to watch an emergency NEC. I think Zumxit will happen but on the ANC's terms after a defeat of impeachment vote and after local elections,” Montalto told Fin24.
The rand hit R17.99 in January following a slide in the currency exchange rate against the dollar following the axing of Finance Minister Nhlanhla Nene on December 9.
