{"id":166927,"date":"2017-03-29T10:33:14","date_gmt":"2017-03-29T08:33:14","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=166927"},"modified":"2017-03-29T10:35:48","modified_gmt":"2017-03-29T08:35:48","slug":"rand-weakens-6-in-three-days-as-markets-wait-for-the-gordhan-bubble-to-burst","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/166927\/rand-weakens-6-in-three-days-as-markets-wait-for-the-gordhan-bubble-to-burst\/","title":{"rendered":"Rand drops 6% in three days as markets wait for the Gordhan bubble to burst"},"content":{"rendered":"<p><span class=\"st\">While reports and rumours abound about the fate of finance minister, Pravin Gordhan, government officials remain mum on the topic, which has not helped the rand&#8217;s cause as a result.<\/span><\/p>\n<p>The rand continued to lose ground against major currencies on Wednesday morning, amid uncertainty around a reportedly imminent cabinet reshuffle.<\/p>\n<p>With all the speculation and insider leaks, the rand has continued to fall, trading at around R13.10 to the dollar by 10h00 &#8211; 6.3% lower than the 20-month lows of R12.35 on Monday.<\/p>\n<ul>\n<li>ZAR\/USD &#8211; R13.11 (-6.2% from Monday)<\/li>\n<li>ZAR\/GBP &#8211; R16.23 (-4.8% from Monday)<\/li>\n<li>ZAR\/EUR &#8211; R14.13 (-5.2% from Monday)<\/li>\n<\/ul>\n<p>President Jacob Zuma&#8217;s apparent move against Gordhan &#8211; and the\u00a0lack of communication around it &#8211; had other knock-on effects too, pushing government bond yields even higher, adding approximately R2.6 billion to government debt, according to Reuters.<\/p>\n<p>The rand&#8217;s demise started on Monday, when president Zuma unexpectedly cancelled an international investor road show, and ordered Gordhan and his deputy, Mcebisi Jonas back to South Africa as a matter of urgency.<\/p>\n<p>The move, and lack of reasoning for it, caused a panic in the market, with speculation rife that president Zuma was about to recall the finance minister and replace him, causing the rand to fall sharply.<\/p>\n<p>Gordhan arrived back in the country on Tuesday amid reports that Zuma had informed the South African Communist Party (SACP) &#8211; of which Gordhan is a member &#8211; and the rest of the ANC&#8217;s &#8216;Top Six&#8217; officials of his intention to reshuffle his cabinet and replace Gordhan.<\/p>\n<p>Gordhan confirmed that he was still finance minister when questioned by the media, however this provided only brief respite for the rand.<\/p>\n<p>Late on Tuesday, EFF leader Julius Malema said that Gordhan had been informed of his imminent dismissal, and claimed that Zuma would make the cabinet changes on Wednesday, some time after the funeral of anti-apartheid stalwart, Ahmed Kathrada.<\/p>\n<p>Analysts are unsure of how bad the market&#8217;s reaction will be, should the cabinet reshuffle go ahead with Gordhan being removed from the finance ministry.<\/p>\n<p>Jonathan Hertz, chief executive officer of Peregrine Holdings, warned that if Gordhan or his deputy, Mcebisi Jonas, are fired, \u201cthe selloff will be vigorous\u2026there will be a shudder in the market. I think you could see R14 (to the dollar).\u201d<\/p>\n<p>Wayne McCurrie, a fund manager at Ashburton Investments, said that if Zuma did fire Gordhan, the rand would probaly not shoot back to R17 to the dollar\u00a0&#8211; a level it last touched following Zuma\u2019s sacking of the previous finance minister,\u00a0Nhlanhla Nene, in December 2015.<\/p>\n<p>McCurrie said that commodity prices had since improved, as had the country\u2019s drought situation. He warned, however, that it could go to R15 to the dollar, \u2018easily\u2019.<\/p>\n<p>Economists have also warned that sacking Gordhan would put South Africa on the fast-track to a ratings downgrade to junk status.<\/p>\n<hr \/>\n<p><strong>Read:\u00a0<a title=\"Pravin Gordhan is still minister of finance\" href=\"https:\/\/businesstech.co.za\/news\/government\/166713\/pravin-gordhan-is-still-minister-of-finance\/\" rel=\"bookmark\">Pravin Gordhan is still minister of finance<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>While reports and rumours abound about the fate of finance minister, Pravin Gordhan, government officials remain mum on the topic, which has not helped the rand&#8217;s cause as a result.<\/p>\n","protected":false},"author":10,"featured_media":114832,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872,11121],"tags":[26],"class_list":["post-166927","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-finance","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/166927","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=166927"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/166927\/revisions"}],"predecessor-version":[{"id":166957,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/166927\/revisions\/166957"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/114832"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=166927"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=166927"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=166927"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}