South Africa’s rand was weaker against the dollar in early Monday trade, despite broad-based greenback losses abroad, partly due to worries about the country’s cloudy domestic political and economic outlook.
Stocks opened flat at 0700 GMT, with the JSE securities exchange’s Top-40 index barely changed from Friday’s close.
At 0705 GMT, the rand was down 0.5 percent at 14.7670 to the dollar from where it closed in New York on Friday.
The currency had climbed to 14.6050 late on Friday, its strongest since early December, on speculation President Jacob Zuma might quit over the fallout from a court ruling that he flouted the law by failing to pay for some of the state funded upgrades to his personal home.
The rand however gave back most of the gains after Zuma only gave a limited apology in a surprise national address and his ruling African National Congress publicly reaffirmed its support for him.
Analysts say investors are increasingly uneasy over Zuma’s leadership of Africa’s most advanced economy after he inexplicably fired former finance minister Nhlanhla Nene in December.
Current Finance Minister Pravin Gordhan warned last Friday that weak growth would generate insufficient revenue to finance all government projects this year.
The rand has managed to hold below the 15.0000 level, but the price action would suggest that it remains vulnerable to any headlines, this as the local political situation remains unpredictable,” Nedbank Capital analysts Mohammed Nalla and Reezwana Sumad said in a note.
On the bond market, government debt prices edged lower, and the yield for the benchmark instrument due in 2026 was up 1.5 basis points at 9.145 percent.
Source: Reuters