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South Africa’s rand steady as markets await Zuma’s fate

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South Africa’s rand was steady in early trade on Monday, buoyed by uncertainty after Cyril Ramaphosa, the new leader of South Africa’s ruling African National Congress, said queries about President Jacob Zuma’s fate would be addressed “as time goes on”.

* At 0645 GMT, the rand traded at 12.36 per dollar, unchanged from its New York close on Friday.

* All eyes this week are on Zuma’s fate and the central bank’s interest rate decision on Thursday. It is expected to keep its key rate unchanged at 6.75 percent.

* There has been widespread speculation that Ramaphosa and his allies are lobbying ANC members to oust Zuma as head of state in the coming weeks, but he made no mention of Zuma’s future in a closely watched speech on Saturday.

* Ramaphosa’s Sunday remarks that Zuma’s fate would be decided “as time goes on” in an interview with South Africa’s eNCA television station have been taken in the local media as a signal that Zuma’s days as head of state are numbered.

* The front page headline in the Business Day newspaper on Monday said “Ramaphosa signals Zuma’s departure”.

* The departure of Zuma, whose administration has been marred by missteps, perceptions of shoddy governance and widespread allegations of graft, is seen as a positive by markets.

* NKC African Economics said in a morning note that the rand was expected to trade in a range on Monday of 12.25 to 12.45 per dollar.

* Stocks were set to open higher at 0700 GMT, with the JSE securities exchange’s Top-40 futures index up 0/26 percent.

* Government bonds firmer with the yield for the benchmark instrument due in 2026 down 1.5 basis points to 8.55 percent.

Credit: CNBC Africa

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