![](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2017\/01\/Worlds-most-volatile-currency.png\")
<\/a><\/p>\nThe Turkish lira has replaced the South African Rand as the world’s most volatile currency\u00a0ending a two-month long reign at the top.<\/p>\n
This is due to Turkey having one of the worst external debt profiles in emerging markets, resulting in the country’s corporate sector chasing the weakening currency\u00a0by buying dollars against Turkey – \u00a0exacerbating the depreciation of the lira in the process, said Bloomberg’s\u00a0Mark Cudmore.<\/p>\n
South Africa replaced the Mexican Peso as the world’s most volatile currency on 8 November 2016, following\u00a0President Jacob Zuma’s ongoing\u00a0battle with Finance Minister Pravin Gordhan.<\/p>\n
The rand has closely tracked with Zuma-related headlines since then, advancing when his position weakened and selling off when Gordhan seemed threatened.<\/p>\n
The result has been a real-world measure\u00a0of the “political risk premium”\u00a0as investors look to buy and flip the rand within days of one another because of how much the currency can change weekly,\u00a0said\u00a0Guillaume Tresca, emerging-market strategist at Credit Agricole SA,<\/p>\n
With tensions between Zuma and Gordhan cooling off in the past few weeks, the currency has stabilised some what, allowing the lira to take top place. This will likely be remedied however, as Turkey’s Central Bank looks to hike internal interests rates to remedy the depreciation.<\/p>\n
Meanwhile South Africa’s problems could just be beginning as the politiciking carries on into 2017, warned Tresca.<\/p>\n
\u201cMy concern is that it\u2019s not the end of the story at all, it\u2019s just the beginning.”<\/p>\n
\u201cI don\u2019t think that Zuma will do nothing. He will find another way to strike back. The rand will remain very hard to trade.\u201d<\/p>\n