South Africa’s rand was weaker early on Tuesday, hurt by a broad recovery in the dollar and locally by the political stalemate as the ruling African National Congress (ANC) said it would meet later in the week to discuss the president’s future.
At 0640 GMT the rand was 0.16 percent weaker at 12.1450 per dollar compared to an overnight close of 12.1250 in New York.
Senior officials of the ANC met on Monday as pressure grew on President Jacob Zuma to step down or for the party to push him out, spurring some short-term gains in the rand.
Zuma’s scandal-plagued tenure has been seen as a weight on the economy, and the rand has soared to its firmest in over two years as the likelihood of his removal heightened after Cyril Ramaphosa was elected party chief in December.
Analysts said the lack of clarity on Zuma was keeping investors cautious and would dent short-term demand.
“This combined with a broad based dollar recovery has the rand on the back foot, and until such time as we have clarity on this, the local unit is likely to remain under pressure, with the 12.00 level likely to provide support,” said Nedbank’s Reezwana Sumad in a note.
Bonds were a touch weaker with the yield on the benchmark paper due in 2026 adding 0.5 basis points to 8.51 percent.
Stocks were set to open lower at 0700 GMT, with the JSE securities exchange’s Top-40 futures index down 3.5 percent.
Reporting by Mfuneko Toyana; Editing by Robin Pomeroy (Reuters)