The rand stabilised around the R14.14/$ mark on Thursday morning but remained fragile as the standoff between the Hawks and Finance Minister Pravin Gordhan continued.
Gordhan‚ through the advice of his lawyers‚ on Wednesday rebuffed the request by the crime-busting unit for him to appear at the unit by Thursday.
“Market moves have been large but not huge; trade has been orderly‚ with exporters rushing in at the higher levels and foreigners buying into the SA bond market‚” Rand Merchant Bank currency analyst John Cairns said in a note.
“The market‚ seemingly‚ is rating the latest political news as similar to that of February and May‚ the dates when the Hawks probe became public and when Minister Gordhan responded. But it could be a lot more — quite possibly the endgame for Gordhan.”
The renewed attack on Gordhan has sent shock waves through the investor community‚ causing bank and retail stocks to fall and the rand to weaken.
The local currency has weakened more than 3% against the dollar since Tuesday‚ a development that threatens the inflation outlook‚ which may force the Reserve Bank to raise interest rates.
The rand was at R14.1354 against the dollar from R14.1532 at the previous close.
It was at R15.9371 against the euro from R15.9414 previously‚ and at R18.6898 against the pound from R18.7304 previously.
The euro was at $1.1275‚ from $1.1263 at its last settlement. – TMG Digital