The Johannesburg Stock Exchange in Sandton.
Cape Town – Markets braced on Friday morning as fears of an imminent ratings downgrade came back into focus as South Africa woke to the news of Thursday’s late night cabinet reshuffle by President Jacob Zuma.

The long-expected axing of the country’s respected finance minister, Pravin Gordhan, and his deputy, Mcebisi Jonas, was seen in some quarters as an open attack on National Treasury.

Cas Coovadia, managing director of the Banking Association of South Africa, said the "vacuum of leadership" caused by the cabinet reshuffle was “of extreme concern for the whole of South Africa”.

“We have no choice but to say this reshuffle is not in the best interests of the country. We are also left with little choice but to question the motives behind this action,” he said.

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The reshuffle raises immediate concerns about the country’s investment-grade credit rating. The Financial Times of London reported on Friday morning that the reshuffle could lead to South Africa being downgraded within days.

Nomura said in a research note: “This is a power show by Zuma who clearly believes he has enough power in the NEC and low enough risk of a parliament split to be removed, to basically do what we wants here.”

The rand, one of the top three emerging-market currencies last year, was heading for an 8 percent loss for the week, according to Bloomberg, in what would be “its worst such performance since the last time Zuma rocked markets with a finance minister firing. Back in December 2015”.