The rand firmed against the US dollar in the afternoon session on Monday as the US celebrated Martin Luther King Jr. Day, a federal holiday, while locally, eyes continued to be focused on the fate of president Jacob Zuma and the central bank\u2019s interest rate decision later this week.<\/p>\n
By 14h00, the rand was up about half a percent against the US currency, however, it was down sharply against both the pound and the euro.<\/p>\n
Bianca Botes, corporate treasury management at Peregrine Treasury Solutions, noted that the rand was hovering around R12.36 to the dollar, with the US currency on the back foot across the board owing to strong commodity prices.<\/p>\n
“The rand remains in a tight range at the moment, with an eye on local politics and the South Africa Monetary Policy Committee (MPC) meeting ahead. We expect the rand to remain within the R12.20 \u2013 R12.50\/$ range, although leaning more towards rand strength,” Botes said.<\/p>\n
The central bank is expected to keep its key rate unchanged at 6.75%.<\/p>\n
“This rand strength is mostly due to dollar weakness and strong commodity prices, as politics are currently only driving immediate and short-term fluctuations.”<\/p>\n
Newly elected ANC president Cyril Ramaphosa hinted at an early Zuma exit on the weekend. Ramaphosa, speaking in a television interview broadcast Sunday by Johannesburg-based eNCA, said the ANC has to be careful about deciding on Zuma\u2019s future as the nation\u2019s leader before he is due to step down in 2019 when general elections are scheduled, calling it a \u201cvery delicate matter.\u201d<\/p>\n
\u201cWhatever we do we need to deal with this matter with the level of maturity it requires, with the proper decorum, and I will say we should never do it in a way that is going to humiliate president Zuma,\u201d he said, as reported by Bloomberg.<\/p>\n
\u201cWe should never do it in a manner that is also going to divide the nation.\u201d<\/p>\n
Ramaphosa, 65, said his discussions with Zuma since taking over the leadership of the ANC have gone \u201cvery, very smoothly.\u201d A commission of inquiry into allegations that Zuma oversaw \u201cstate capture\u201d by allowing members of the Gupta family to influence cabinet appointments and the award of government contracts must go ahead without delay, he said.<\/p>\n
The Automobile Association (AA), meanwhile, noted that fuel prices are set for month-end decreases. “The Rand\/US dollar exchange rate has had one of its flattest periods of trading in recent times,” it said.<\/p>\n
“It has traded in a very narrow band between R12.30 and R12.40 to the US currency since the last week of December, bringing some welcome stability.”<\/p>\n
The AA said that current data predicts a decrease in petrol of nearly 41 cents a litre, with diesel down by 23 cents and illuminating paraffin dropping 26 cents.<\/p>\n
“Continued stability in fuel prices for 2018 will largely depend on political and economic factors which affect South Africa’s attractiveness as an investment destination,” the association said.<\/p>\n