Cape Town - Analysts expect the rand to breach the psychological barrier of R13 against the dollar should the vote of confidence against the president Jacob Zuma go against the president, later on, today, while the expectation is that the local unit will weaken significantly should the president emerge victorious.
In early trade on Tuesday, the local unit was bid R13.24, steady from the overnight spot price as the markets waited anxiously on how the vote of confidence will unfold later on the day.
The Rand had strengthened to a month’s high on Monday, supported by the announcement from National Assembly speaker Baleka Mbete that the vote of confidence against Zuma will be conducted by a secret ballot.
Peter Attard Montalto, a research analyst at Nomura, says that he expects the vote to fail, but attaches a 30% chance of success.
“The motion may well get a majority but may fail to reach the required 201 members owing to a significant number of ANC MPs abstaining.
If the vote passes we will be in a period of deep uncertainty with the possibility of President Zuma not going quietly, early elections in coming months or endless court challenge,” Attard Montalto says.
BUSINESS REPORT ONLINE