Cape Town – The rand strengthened to a level not seen since early March 2015 on Wednesday evening, threatening to break through the R11.70 level to the dollar.
The local currency firmed by 2% on the day, despite President Jacob Zuma not stepping down after the ANC’s national executive committee (NEC) resolved late on Monday that he should immediately vacate office.
At 19:30 it was trading at R11.71 to the greenback. It had opened the day at 11.96/$.
“There are two factors driving the ZAR currently,” Wichard Cilliers, a currency dealer at TreasuryOne, told Fin24 on Wednesday evening.
“The one is the vote of no confidence in President Zuma. The market believes that the country will have a new president by the weekend.”
Cilliers said the other factor was relative US dollar weakness.
“For now all eyes will remain on the office of the President to see what the next move will be. There are rumours that the president is filing for an interdict against the motion of no confidence,” he said.
Zuma, in an interview with the SABC on Wednesday afternoon, had said he didn’t understand why the ANC wanted him to leave.
“I couldn’t get why this had become such an issue,” he said. “I need to be furnished [with reasons] on what I have done.”
The interview was the first time that Zuma had publicly responded to the ANC’s decision to recall him. But the rand, after weakening somewhat in the aftermath of Zuma’s address, started to again firm.
Zuma will face a no confidence vote in Parliament on Thursday afternoon, unless he resigns or finds some mechanism to stall it going ahead. He has promised to deliver a statement on the matter on Wednesday evening, but by 19:30 had not yet done so.
The ANC caucus in Parliament, meanwhile, has said it wants to see Cyril Ramaphosa elected as SA’s new President on Friday morning.
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