Former President Jacob Zuma. (AP Photo/Themba Hadebe)

JOHANNESBURG - The rand raced to R11.67 against the US dollar in early trade today as the markets cheered Jacob Zuma’s resignation as head of state and Cyril Ramaphosa’s impending election.

The local currency which has been the best performing currency against the dollar post the ANC elective conference in December was set to remain steady at around R11.70 against the dollar mark in the coming sessions.

Bianca Botes, an analyst at Peregrine Treasury Solutions, said the rand is expected to trade in a range of R11.70 to R12 against the greenback, leading up to the budget speech next.

“Should the state of the nation and the budget speech go down without too much criticism, one can almost assume that Moody's will hold off from downgrading South Africa’s credit rating for the time being,’’ Botes said.

Rand investors, global market participants, and the rating agencies will be keenly awaiting the 2018 Budget.

It is unclear if there will be a mass cabinet reshuffle under the new president of the Republic.

Business sentiment under the Zuma presidency had been battered, with the markets often frowning at his corruption-riddled administration, which came to a head with the state capture allegations.

However, business sentiment has been resurgent since Ramaphosa, whom the markers deem as business-friendly, took the helm of the ruling ANC.

Raymond Parsons, a professor at the North-West University School of Economics, said the latest political developments could now restore business confidence in ways which might lift SA's growth rate closer to 2 percent in 2018/19. 

 “The rand has continued to react favourably to the latest political outcomes which, if sustained, will reduce inflation as well as inflationary expectations, and thus might encourage the SARB to lower interest rates later this year,” Parsons said.