President Jacob Zuma. IOL
JOHANNESBURG - The rand has been holding strong in early trade on Tuesday after news broke that the ANC had given President Jacob Zuma an ultimatum to step down as head of the nation.

This morning the rand was at R11.93 to the dollar, 16.60cents stronger than at the same time on Friday. It had gained as much as R11.88 earlier yesterday after a reporter from the SABC, citing confidential sources, said Zuma had agreed to step down.

Presidency spokesman Bongani Ngqulunga dismissed the report as “fake news”, and the rand subsequently gave back gains to near where it had been trading before the report.

“The market is waiting for some clarity on this matter, and amid all of this uncertainty and news flow the rand will continue to be volatile,” said ETM Analytics market analyst, Halen Bothma.

The rand’s fortunes have been closely tied to political outcomes over the past couple of years, with the currency rallying on any sign of an end to the corruption scandals and economic decline that have tainted Zuma’s time in office.

Bonds gained on the reports of news of Zuma’s resignation, with yield on the benchmark paper due in 2026 cutting 10 basis points to 8.39percent.

The ANC this morning decided to sack Zuma as President, a senior official said after a marathon meeting to determine the fate of a leader.

The decision by the ruling party’s national executive came in the early hours of the morning, after 13 hours of tense deliberations and one face-to-face meeting between Zuma and Cyril Ramaphosa.

Zuma has been living on borrowed time since Ramaphosa was elected as head of the ANC in December, narrowly defeating Zuma’s ex-wife, Nkosazana Dlamini-Zuma.

Despite the damning decision to order Zuma’s “recall”, the media have speculated that the 75-year-old might yet defy the party’s wishes, forcing it into the indignity of having to unseat him in parliament.

-REUTERS