Share

US rates threat, Gordhan woes keep rand on edge

Cape Town – While ANC secretary general Gwede Mantashe’s address regarding Finance Minister Pravin Gordhan’s battle with the Hawks pushed the rand down 10 cents on Tuesday, it was the US rate hike threat that caused further concern over the currency.

“The rate threat is feeding into the rand mainly via the stronger dollar,” said RMB analyst John Cairns on Wednesday.

The rand was trading marginally lower at R14.46/$ at 09:00 on Wednesday.

“The markets are starting to take the threat of a Fed hike seriously,” he said. “Fed talk certainly seems to be preparing us for higher rates. And data from the last few days has also played along: while there are still no signs of accelerating inflation, consumer confidence and spending remain strong.

“December seems the most obvious time for the Fed to act. But September is not out of the picture,” he said.

Regarding Mantashe’s address, the market decided to move the rand up another 10c on the back of it, Umkhulu Consulting analyst Adam Phillips said on Wednesday.

Mantashe said officials who are charged should step down from their roles. He was clearly referring to Gordhan's refusal last week to report to the Hawks' office in Pretoria to sign a warning statement for his involvement in the so-called rogue unit established when he was commissioner at the South African Revenue Service. Gordhan has repeatedly stated that he had done nothing wrong. It is believed that signing a warning statement is a precursor for arrest.

He also stated at an ANC press briefing on the public spats between Gordhan and the Hawks, Eskom and Treasury, and allegations of corruption involving the ANC and rail agency Prasa, that ministers should cooperate with police and answer questions by the Hawks if summoned.

“Spreads are very wide on the rand and this is understandable considering what is going on,” said Phillips. “Speculation will drive it in the short term until the circus of news stops.

“Given the dollar rise since last Friday, we can only really at look at clawing back to R14/$ if things go back to normal, while I don't really want to speculate where we could go on the upside.”

Cairns said Mantashe’s statement was carefully worded to avoid taking sides, saying that it has confidence in Gordhan and that the uncertainty was damaging, but that Gordhan must answer to the Hawks.

“The public enterprise minister took a stronger stance - demanding that Eskom must immediately release the report required by Treasury - but this is a small firefight in the bigger war.”

Eskom complied hours later.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.92
+0.1%
Rand - Pound
23.88
+0.1%
Rand - Euro
20.38
+0.2%
Rand - Aus dollar
12.32
+0.2%
Rand - Yen
0.13
+0.1%
Platinum
908.05
+1.2%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders