With the president’s fate hanging in the balance, economists say political instability is spooking investors.
JOHANNESBURG – Economists say the country can expect the rand to continue to weaken until there is some political stability.
The local currency fell on Thursday after a report by an independent Section 89 panel found that President Cyril Ramaphosa may have broken the Constitution and the law.
The rand hit 17.95 rand per dollar on Thursday, down more than 3%.
With the president’s fate hanging in the balance, economists say political instability is spooking investors.
Economist Dale McKinley said global markets tend to react to unpredictability that affects the local currency.
“It’s notoriously unpredictable, particularly in currency markets, and is likely to continue to be so in the near term, so we can expect a bumpy ride ahead.”
Responding to reports of stabilization of the rand on Friday, economist Bonke Dumisa said that was not the case when comparing the local currency to where it was on Wednesday.
“As of today, it opened at 17.56 rand, still a huge loss.”
Dumisa added that the rand could remain volatile until Tuesday’s meeting.
