Rand sinks after Trump land reform tweet
JOHANNESBURG - South Africa’s rand stretched overnight losses to 1.52 percent against the dollar on Thursday, slipping to 14.3600 after U.S. President Donald Trump raised concerns about Pretoria’s land reform plans.
Trump tweeted late on Wednesday that he would ask his Secretary of State to look closely at the changes proposed by the ruling African National Congress including, he said, “expropriations and large-scale killing of farmers”.
Trump’s tweet appeared to be a response to a Fox News report on Wednesday that focused on the land issue and murders of white farmers.
South Africa’s foreign ministry called the remarks “crude and offensive” and said a subsequent denial from Trump was not categorical. State broadcaster SABC said President Cyril Ramaphosa would seek clarification from the U.S. embassy.
Ramaphosa said on Aug. 1 that the ruling African National Congress (ANC) was forging ahead with plans to change the constitution to allow the expropriation of land without compensation.
Whites still own most of South Africa’s land more than two decades after the end of apartheid.
The move has unnerved some investors already concerned about the country’s weak economic growth, ballooning public debt and policy missteps.
In June Moody’s - the last of the top three credit agencies to rate the country’s debt at investment grade - said uncertainty around land and mining reforms risked limiting investment.
“Mr Trump’s tweet last night about South Africa land redistribution, (and) a ...stronger dollar combined with domestic concerns will not be considered all that fantastic for local financial markets,” said Standard Bank’s chief trader Warrick Butler.
Local bonds were flat, with the yield on benchmark government paper due in 2026 down 1 basis point to 8.975 percent.