Rand leads currency drop as Zuma replaces finance minister

South Africa’s rand led declined in major currencies a day after President Jacob Zuma replaced Pravin Gordhan as finance minister and appointed new ministers to portfolios including mining and energy.

The rand snapped three days of gains, weakening 0.5% to 10.35 per dollar by 11.20am in Johannesburg, the most among 16 major currencies monitored by Bloomberg. Yields on government bonds due December 2026 climbed three basis points, or 0.03 percentage point, to 8.08%.

Zuma, who took office for a second five-year term after the ruling ANC’s election win on May 7, promoted Nhlanhla Nene, a deputy to Gordhan, who headed the ministry since 2009. He enlarged his Cabinet to 35 members from 33 and created a ministry responsible for small-business development.

The Cabinet “is less business-friendly than the market expected”, John Cairns, a foreign-currency strategist at Rand Merchant Bank (RMB) in Johannesburg, said in a note to clients. Nene’s experience as deputy minister should reassure markets about policy continuity, RMB said.

Data on Tuesday may show South Africa’s economy contracted in the first quarter as a strike at platinum mines curbed production, weighing on the rand. Gross domestic product probably fell 0.2% in the three months through March, compared with growth of 3.8% the previous quarter, according to the median estimate of 19 economists in a Bloomberg survey.

Weaker growth is “rand-negative” because it reduces the likelihood of a reserve bank rate increase and puts pressure on the current-account deficit, Bruce Donald, head of currency strategy at Standard Bank Group in Johannesburg, said in a note to clients. – Bloomberg

Advertisting

Hlophe complaint is an eerie echo

But the new complaint against the Western Cape judge president is also unprecedented

Mabuza contract grows by R10m

Eskom’s negotiators in a R100-million maintenance contract came back with a proposal to push up the costs

‘There were no marks on his neck’, Neil Aggett inquest...

The trade unionist’s partner at the time he was detained at John Vorster Square says she now believes his death was not a suicide

Study unpacks the ‘hidden racism’ at Stellenbosch

Students say they feel unseen and unheard at the university because of their skin colour
Advertising

Press Releases

Gender-based violence is an affront to our humanity

Gender-based violence is an affront to our humanity

UK-Africa investment summit 2020: Think Africa Invest SA

UK-Africa investment summit 2020: Think Africa Invest SA

MTN unveils TikTok bundles

Customised MTN TikTok data bundles are available to all prepaid customers on *136*2#.

Marketers need to reinvent themselves

Marketing is an exciting discipline, offering the perfect fit for individuals who are equally interested in business, human dynamics and strategic thinking. But the...

Upskill yourself to land your dream job in 2020

If you received admission to an IIE Higher Certificate qualification, once you have graduated, you can articulate to an IIE Diploma and then IIE Bachelor's degree at IIE Rosebank College.

South Africans unsure of what to expect in 2020

Almost half (49%) of South Africans, 15 years and older, agree or strongly agree that they view 2020 with optimism.

KZN teacher educators jet off to Columbia University

A group of academics were selected as participants of the programme focused on PhD completion, mobility, supervision capacity development and the generation of high-impact research.

New-style star accretion bursts dazzle astronomers

Associate Professor James O Chibueze and Dr SP van den Heever are part of an international team of astronomers studying the G358-MM1 high-mass protostar.