Standard Bank Research said the \u201crand sacrificed most of the gains it had made since the end of January\u201d, which analysts on Monday said was due to a boiling point in politics involving President Jacob Zuma and Finance Minister Pravin Gordhan.<\/p>\n
Zuma said on Friday that he will not interfere with a SA Revenue Service (Sars) commissioned investigation by the Hawks into a \u2018rogue unit\u2019 that allegedly operated while Gordhan was commissioner at Sars.<\/p>\n
The current Sars commissioner, Tom Moyane, is at loggerheads with Gordhan over restructuring plans that will undo the well-oiled Sars machine that Gordhan spent years building.<\/p>\n
Gordhan on Friday said there is a group of people who are not interested in the economic stability of the country and the welfare of its people. “It seems they are interested in disrupting institutions and destroying reputations.”<\/p>\n
Moyane reports directly to Gordhan, but is a close ally and friend of Zuma.<\/p>\n
The rand weakened on Friday, closing at R16.16\/$, compared to Thursday\u2019s close of R15.60\/$. It had improved somewhat by Monday at 10:00, trading at R16.12\/$.<\/p>\n
Downgrade will now happen ‘quicker than we think’<\/strong><\/p>\n The infighting between the ANC and Sars as Gordhan squares off with Moyane \u201cthreatens to hand us a downgrading quicker then we think\u201d, according to Umkhulu Consulting\u2019s Adam Phillips on Monday.<\/p>\n The Democratic Alliance called for a judicial inquiry into the long-running saga.<\/p>\n \u201cA third strike could spell disaster for us all,\u201d Phillips said. \u201cIt might be that we see some nervous end of month selling, but for proper selling we would need some direction from our leader, not just certain members of the ANC executive.\u201d<\/p>\n Rand Merchant Bank economist John Cairns said Friday\u2019s rand losses can mostly be explained by Gordhan\u2019s rift with Moyane.<\/p>\n \u201cTalk is that one of the parties will have to go,\u201d he said on Monday. \u201cThe market fears it will be Gordhan.<\/p>\n \u201cExpect further large swings in the rand,\u201d he said. \u201cWith confidence so low it will not take much to trigger a further run.\u201d<\/p>\n Rand Merchant Bank economist Deon Kohlmeyer said the local bond market followed suit on Friday, with the close on the R186 at 9.44% after opening the day at 9.22%.<\/p>\n \u201cOver the weekend USD\/ZAR touched a high of around 16.30 but has since retraced to near the 16 level by this morning,\u201d he said.<\/p>\n \u201cThis week the rand will again be the driving force behind bond yields, with some local data to add some fundamental flavour to proceedings,\u201d he said. \u201cFriday’s moves may have been exacerbated by thin liquidity, but the ease with which the rand moves weaker does not bode well for the currency going forward.\u201d<\/p>\n Rand will swing to R16.45\/$ – NKC<\/strong><\/p>\n NKC Resarch said on Monday that following the political fracas on Friday, the \u201crand fell beyond R16\/$ to its weakest level in three weeks and hopes of correction to below R15\/$ have been wiped off table\u201d.<\/p>\n \u201cWhile we continue to gauge the rand as being undervalued, we will need to see a string of data improvements in coming quarters for there to be a chance of sentiment reversal anytime soon,\u201d it said. \u201cExpect the range on the SA currency this week to be between R15.85\/$ and R16.45\/$.\u201d<\/p>\n NKC said the rand has rebounded since hitting all-time lows in thin liquidity during mid-January, \u201caided by hawkish action from the SARB and generally calmer emerging markets\u201d.<\/p>\n \u201cHowever, some gains have been surrendered in the wake of an underwhelming fiscal budget speech and risks remain stacked to the downside.\u201d<\/p>\n Standard Bank Research said US data didn\u2019t help the rand\u2019s losses either. However, it said: \u201cAlthough we would not be surprised to see the rand regain some of its losses from Friday, the market is now likely to be much more nervous about sudden rand reversals.\u201d<\/p>\n Affecting the rand this week could be the reaction after Stats SA announces its latest gross domestic product figures on Tuesday.<\/p>\n Bloomberg consensus expectations are for the economic growth to have increased by 0.8% quarter-on-quarter, from 0.7% in Q3:15, Standard Bank said. GDP growth is expected to have slipped to 0.5% in Q4:15 from 1.0% in Q3:15, in annualised growth.<\/p>\n Fin24<\/a><\/p>\n Zuma abandons Gordhan as Hawks investigation heats up: report<\/a><\/span><\/strong><\/p>\n Rand takes a hit after budget speech<\/a><\/strong><\/p>\n The real value of the rand<\/a><\/strong><\/p>\n