Rand closes strong ahead of Zuma address
The rand received another boon on Friday as it closed at its strongest levels in 2016.
By close of trade on Friday (1 April 2016), the rand strengthened to R14.63 against the dollar, marking a complete run-back to levels before the South African market crash in December 2015.
On what has been dubbed “9/12”, Zuma unexpectedly fired former finance minister Nhlanhla Nene, causing the rand to tank from levels around R14.70 to the dollar, to as low as R17.99 to the dollar.
The move wiped as much as R500 billion from the South African economy.
On Thursday, South Africa’s currency hit a near 4-month high against the dollar as Chief Justice Mogoeng Mogoeng laid down a judgement saying that Zuma failed to respect the constitution when he ignored the instructions of the Public Protector to repay some of the money spent on his private residence.
The Constitutional Court ruled that Zuma – and the National Assembly – were in violation of the constitution, and ordered that the president pay back the money (an amount to be determined by Treasury).
As the judgement was being read out, the rand strengthened to as low as R14.74 to the dollar, before settling at R14.79.
While many attribute the strengthening of the rand to the political events at play around the president, some analysts have said that the recent currency strength has little to do with it.
The strong rand can also be attributed to dollar weakness, following comments out of the US related to its own economy, which has sent investors to emerging markets.
More on the rand
Rand strengthens as Zuma red-carded over Nkandla
Rand breaks back through R15 to the dollar
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