Rand below R14 vs the dollar amid Zuma no confidence debate and credit ratings
South Africa’s rand firmed 2% against the dollar on Monday after rating agencies Fitch and Moody’s affirmed the country’s investment-grade credit ratings.
The rand traded at R13.85 against the dollar, was 1.65% firmer against the pound at R17.27, and also improved 1.24% against the euro, to R14.76 in mid-day trade.
Ratings agencies Fitch and Moody’s affirmed South Africa’s investment-grade credit ratings late on Friday. Fitch rates South Africa one notch above ‘junk’, while Moody’s has the sovereign two levels above sub-investment grade, noted Reuters.
The ANC’s national executive committee (
The committee extended its meeting on Monday to debate Zuma’s future. The NEC is the only body with powers to recall the party president in between its conferences.
Economists have estimated how much the South African rand would improve if Jacob Zuma stepped down as president of the country.
Consensus among them in a report by Reuters, is an almost immediate improvement of 10% to 15% – representing a R670 billion boost to the economy.
“The rand has had a gap open this morning which is likely due to the combination of a weaker dollar but also the positive news from the rating agencies,” Standard Bank chief currency trader Warrick Butler said in a note.
Reuters also reported that focus was also on Zuma, who is facing a vote of no confidence by the ruling party’s executive committee.
“The market should be cautious about expecting too much, having been disappointed so often in the past,” Rand Merchant Bank analyst John Cairns said.
Read: This is how much the rand will improve if Zuma resigned today
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