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<\/a><\/p>\nThe rand’s reaction to recent events in South Africa has not been as shocking as some had predicted, with the rand ‘only’ losing around R1.50 to the dollar since president Jacob Zuma fired former finance minister Pravin Gordhan.<\/p>\n
The currency was hit by two subsequent ratings downgrades to junk by S&P Global and Fitch, but has not yet breached the R14.00 level, despite coming close (R13.94) earlier in the week.<\/p>\n
According to analysts, the reason for this is that the build up to Gordhan’s axing, as well as the junk status downgrades, have been priced into the market for some time. Even so, the rand is in a volatile position, and is expected to worsen as the effects of recent effects take hold.<\/p>\n
Further pressure on the rand is expected when the third ratings firm, Moody’s delivers its report on the country, with many expecting another downgrade (though only by one notch, to one level above junk status), and a further downgrade by S&P on South Africa’s local currency debt, which is still currently sitting above junk status.<\/p>\n
Analysts at Nomura anticipate the rand gradually weakening to around R15.50 by the end of 2017, as the country moves through its political calendar leading up to the ANC’s elective conference in December.<\/p>\n
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