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Rand rallies on report of Zuma removal talks

May 23 2017 16:07
Fin24 with Bloomberg

Cape Town - The rand raced to R13.02/$ on Tuesday as traders reacted on a Bloomberg report that the top leadership of the ruling African National Congress will discuss the option of removing President Jacob Zuma from his post at a May 26-28 meeting.

The news agency quoted two senior party officials who will be in attendance, but asked not to be identified because they aren’t authorised to speak publicly on the matter.

READ: ANC leaders to discuss Zuma removal at NEC - Bloomberg

By 15:54 the local unit was trading at R13.09 to the greenback as the suspected terrorist attack in Manchester still weighed on risky emerging market assets. The rand traded as high as R13.31 to the US dollar on reports that 22 people were killed on Monday night in a suicide bomb attack after an Ariana Grande concert in Manchester.

According to Bloomberg, the ANC’s national executive committee is due to discuss a motion of no confidence in Zuma that has been filed by opposition parties in Parliament. Some members of the panel will also raise the possibility of the ANC taking the matter into its own hands, according to the party officials, who sit on the decision-making panel.

The rand gained as much as 1.5% against the dollar on the news.

ANC spokesperson Zizi Kodwa said that while the agenda will only be set at the meeting, the committee wouldn’t discuss Zuma’s removal.

While the committee rejected the possibility of ousting Zuma at a meeting in November, opposition to his rule has mounted within the party’s ranks following his March 31 decision to fire Pravin Gordhan as finance minister, a move that prompted S&P Global Ratings and Fitch Ratings to downgrade South Africa's sovereign credit rating to junk.

The ANC will want to avoid a situation in which its MPs back the opposition motion to force Zuma to resign, Anthony Butler, a political science professor at the University of Cape Town, told Bloomberg.

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