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Rand gains on 'urgent' ANC top six meeting

Feb 09 2018 09:54
Lameez Omarjee

Cape Town - The rand traded stronger on Friday morning, which TreasuryOne dealer Wichard Cilliers attributed to reports that the ANC’s top six have been summoned to an urgent meeting with President Jacob Zuma.

The currency opened at R12.16 to the US dollar and strengthened as much as R12.05 to the greenback. By 09:15 it was trading at R12.07.

News24 reported earlier that five of the ANC’s top officials were pulled out of a walkabout on Friday ahead of Nelson Mandela centenary celebrations this weekend, to see to “urgent matters” in Gauteng.

ANC president Cyril Ramaphosa earlier withdrew from the programme and is expected to continue his meeting with Zuma.

ANC Western Cape secretary Faiez Jacobs told News24 that the officials would be back in Cape Town to take part in a rally on Sunday. The mobilisation or walkabout scheduled on Friday is an effort to drum up support among ANC supporters for the Sunday rally.

TreasuryOne dealer Andre Botha expects the rand to react to local factors related to Zuma’s future. However, in the longer term the correction in US equity markets is also at play as emerging market currencies are likely to react to movements in the US.

Adam Phillips, treasury specialist from Umkhulu Consulting, is also of the view that international events will overshadow the matter of Zuma's exit.

“However, any economic news will be nonchalantly looked at, as political news will undoubtedly be at the forefront this weekend,” said Phillips. “Opposition parties want action by Sunday, otherwise they are going ahead with another no confidence vote.”

Phillips expects the rand to reach R12.20/$. He noted that the currency’s movement has been steady compared to other emerging market currencies.

Rand Merchant Bank economist Isaah Mhlanga said local markets will be on the “lookout” for news leaks on when Zuma will announce his departure. But he warned against fake news and alternative facts.

Bianca Botes, corporate treasury management at Peregrine Treasury Solutions, is of the view that the removal of Zuma would see the rand trade stronger at R11.80/$. She added that this will not be sustainable in the medium to long term.

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cyril ramaphosa  |  jacob zuma  |  currencies  |  markets  |  rand


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