The rand fell more than 2% on Monday after Public Protector Busisiwe Mkhwebane controversially recommended amending the Constitution to change the mandate of the Reserve Bank. Although most analysts said it was unlikely the recommendation would be implemented, the rand initially fell sharply before recovering as ratings agencies regard the Bank’s independence as a positive factor in their analysis of the South African economy. The rand was at R12.92/$ in early evening trade, from R12.7844/$ after weakening to R13.0558/$ in intraday trade. Nomura emerging markets investment economist Peter Attard Montalto said that a constitutional change to shift the Bank’s mandate from protecting the value of the rand in favour of the socioeconomic wellbeing of citizens was unlikely. Attard Montalto said it was “a live-wire issue. Even if a change here is not likely to actually occur, the risk of it is important to markets and ratings agencies.” Bond yields rose as prices fell on foreign selling. T...
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