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The rand, which opened at R13.32/$ on Monday morning, will remain vulnerable to local political headwinds this week, according to analysts.
By 13:42 the local currency was trading at R13.44 to the dollar, down 0.94% on the day.
“All is not plain sailing for the rand heading into this week, as there is still a dark cloud of local politics hanging over us,” said Andre Botha of TreasuryONE in an morning update.
“The reaction from the land expropriation decision last week had a crippling effect on the rand and we saw the rand on the back foot for most of [last] week until the reprieve on Friday afternoon.
“This week there will be a Cabinet meeting and it is likely that the issue will be on the top of the agenda,” he said.
“Should the details continue to be murky we could see the rand on the back foot, as uncertainty plus emerging markets don't gel,” explained Botha.
Cabinet will be holding a two-day meeting on Tuesday and Wednesday in Pretoria.
In addition to local politics, the on-going trade tariff dispute between the US and China would also impact the movements of emerging market currencies.
Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions, said in statement the land debate is causing uncertainty. “No investor likes uncertainty and even less so in a time of a risk-averse global backdrop.”
“The rand remains on the back foot with pressure from politics, both locally and globally, likely to add to the currency’s woes,” she said.
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