Publications
Partners
Cape Town - The rand weakened to over R13 to the US dollar after the ANC national executive committee's (NEC's) announcement that Jacob Zuma is still the president, despite growing pressure on him to stand down.
ANC secretary general Gwede Mantashe said at a press briefing on Monday that the vote of no confidence was tabled but never discussed over the weekend.
He said it is about the ANC and not about one person, and that the ruling party should focus on alleviating poverty, inequality and unemployment.
The market reaction was initially muted, with the USDZAR still trading at R12.95 during the announcement.
TreasuryOne also noted that the UK and US are having long weekends, "so liquidity is a bit slow today".
By 16:04 the rand was trading at R12.99/$ after shooting above R13 to the greenback. This was off an intra-day low on R12.65.
Bloomberg and News24 sources earlier revealed that Zuma won the NEC debate, accused foreign agents of being behind the attempt to remove him and said the issue of the NEC ousting him must never be raised again.
The rand first started gaining ground following a Bloomberg report last Tuesday, which cited two senior party officials as saying the NEC would discuss the option of removing Zuma from his post at the May 26-28 meeting.
The rand made massive gains on this revelation, strengthening from R13.31/$ on May 22 to highs of R13.02/$ on May 23. It then dipped below R13 to the greenback for the rest of the week, trading between R12.90/$ and R13.00/$. When trading reopened on Sunday night at 21:00, the rand quickly gained 2% before returning to its Friday close of R12.86/$.
Analysts now believe the rand could return to levels seen last Monday.
“We could see the R13.00/$ level tested and a run up to R13.10/$ on the cards today,” explained Gerard van der Westhuizen, dealer at TreasuryOne, in a note on Monday.
“The remainder of the week we feel that the market will revert back to the levels (R13.10/$ to R13.20/$) seen before the initial announcement that the meeting will be held this past weekend,” he said.
SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.
Read Fin24's top stories trending on Twitter: Fin24’s top stories
