CAPE TOWN - The rand was trounced by the dollar yesterday after a tweet by US President Donald Trump about South Africa’s land debate planted thoughts of possible sanctions against the country.
The currency weakened 1.7 percent after Trump said he asked Secretary of State Mike Pompeo “to closely study the South Africa land and farm seizures and expropriations”, according to Bloomberg.
TreasuryONE senior currency dealer Andre Botha said in Parliment President Cyril Ramaphosa addressed some of the issues regarding the land reform. “Key among which is that he does not support nationalisation of land and that the process of redistribution will be done in an orderly fashion, with land owned by the state and municipalities that are not used or underutilised being earmarked for the redistribution.”
This was expected to alleviate some fears among investors and the rand to continue on its strengthen path during the session.
“Furthermore, the US Fed minutes did not indicate a desire from the Fed hike rates quicker than their forward guidance suggests. This has nibbed some of the calls for higher rates faster in the bud,” said Botha.