Financial experts say the South African Rand strengthened by 1,8 percent against the greenback, Friday after falling nearly four percent in the last two days, resulting from rumors of President Ramaphosa possibly vacating office over a report that found preliminary evidence that he may have violated the constitution.
“I think the knee jerk reaction yesterday was just to sell the rand but given that Ramaphosa is not resigning immediately, investors are pinning their hopes to him staying in office,” Per Hammarlund, the chief emerging markers strategist at SEB in Stockholm, Sweden said.
Hammarlund said the Rand strengthened resulting from investors being confident that Ramaphosa would be staying at the helm.
“Given that he has a more business-friendly profile than many others, markers are pinning their hopes on him staying in office,” added Hammarlund.
South Africa’s dollar-denominated sovereign bonds also rose to one cent to the dollar amid talks of senior members of the ruling party gathering Friday to determine whether Ramaphosa would stay on as president.
Other emerging market currencies also reported higher amid the dropping of value of the dollar ahead of the release of data that will likely show minimum growth in the United States job sector in nearly two years.
Most major central and eastern European currencies edged higher against a flat euro. European Central Bank President Christine Lagarde warned on Friday that some European governments' fiscal policies could lead to excess demand.