Rand Stable After Losing Ground Following Cabinet Reshuffle

By Tiso Blackstar Group
News24
October 18, 2017018

The rand was relatively calm on Wednesday morning‚ a day after President Jacob Zuma shook up his executive‚ in a surprise move that unsettled the markets.

The rand lost ground in the immediate aftermath of yet another Cabinet reshuffle‚ which revived concern about local political risks.

In March‚ Zuma fired Pravin Gordhan as finance minister under controversial circumstances. The move at the time knocked business and investor sentiment‚ leading to a downward revision in economic growth forecasts.

The latest Cabinet changes come just days before Finance Minister Malusi Gigaba is due to table the medium-term budget policy statement‚ which some were hoping could help restore business confidence.

The rand was little changed in early trade at R13.40/$‚ suggesting that markets had adopted a wait-and-see attitude as the political developments play out.

“The Cabinet reshuffle helped spur our long-expected rand correction. Some rand premium relative to other risk currencies still exists but we would be cautious against expecting ongoing losses‚” said Rand Merchant Bank currency strategist John Cairns.

At 9.30am‚ the rand was at R13.4028 to the dollar from R13.3927.

It was at R15.7687 to the euro from R15.7621 and at R17.6654 to the pound from R17.6569.

The euro was at $1.1766 from $1.1768.

by Andries Mahlangu -BusinessLIVE