Rand tanks on Zuma cancelling Gordhan’s investment roadshow
The South African rand crumbled in mid-morning trade on Monday, following reports that president Jacob Zuma had cancelled an international investor roadshow, and ordered finance minister Pravin Gordhan and his deputy, Mcebisi Jonas, back to the country “urgently”.
The rand opened trade at around R12.34 on Monday (27 March), but weakened significantly to R12.64 by 11h00, undoing much of the gain made in the past week.
The ‘urgent’ order for Gordhan and Jonas to return to the country sparked cabinet reshuffle fears, with analysts expecting a move by Zuma to remove and replace Gordhan or Jonas, or even both.
There has been no official statement from the presidency on the reported cancellation, however Treasury has reportedly confirmed that it received communication about the US leg of the roadshow being cancelled.
Analysts have been anticipating the reshuffle for some time, with the last week in March/early April being seen as the most opportune time, giving Zuma the chance to bring former AU chair and ANC presidential hopeful Nkosazana Dlamini-Zuma back into government.
However, it is understood that Zuma will also use the opportunity to tighten up his ranks, and to push out those who are seen as opposed to him – including Gordhan and Jonas, among others.
Research analysts at Nomura hold that Gordhan’s position as finance minister may be safe from the expected reshuffle – as removing him would hold dire consequences for the economy – but note his security in the position has diminished over the past few months.
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