It seems the local currency is in a free fall mode just like the end of 2015 when then President Jacob Zuma had fired the Finance Minister Nhlanhla Nene.
On Friday afternoon the rand traded at R14.80 to the dollar. This was 72cents weaker than the R14.08 of the previous Friday and already down 157c, or 11.9percent since the beginning of August.
Against the pound, the rand lost 90c over the week and traded on Friday at R18.82 (-8.4percent month-to-date). The currency also had tumbled against the euro and depreciated by 85c to R16.88 (-9.3percent) from August1.
Geopolitical factors continued to play havoc on emerging currencies last week. In Turkey an appeals court rejected US pastor Andrew Brunson’s bid for freedom. The move increased fears for a new round of sanctions by the Trump administration.
On the domestic front, the judicial commission investigating the alleged plunder of state funds during Zuma’s rule begins public hearings today. More than R100billion may have been stolen, according to analysts’ estimates.
The euphoria after the election of President Cyril Ramaphosa (commonly referred to as the Ramaphobia), seems to be over, and the realities of the challenges facing the ANC and the country are becoming evident.
The introduction of a bill by the EFF to nationalise the South African Reserve Bank, possibly putting the independence of the bank in jeopardy, also rattled the rand.
Meanwhile, the yield for South Africa’s benchmark 2026 bond (R186) was up 18 basis points to 9.02percent on Friday and already had increased by 5percent since the beginning of August.
On the JSE, the share prices continue their volatile mood.
Share indices experienced big losses on Wednesday, after renewed tariff threats between the US and China, as well as the ongoing crisis between the Trump administration and Syria.
The all share index suffered one of its biggest one-day losses of 1 962 points, or 3.4percent on the day. The index ended the week 1055 points lower at 56647 points.