Calm rand likely to swing back to volatility as ANC conference approaches
The notoriously volatile rand has been sailing into calmer waters in recent months, with price swings narrowing to the lowest level in almost three years. That’s about to change, options pricing suggests. The rand’s three-month implied volatility against the dollar has soared relative to actual fluctuations as the ANCs leadership contest approaches, suggesting traders are paying up for protection ahead of an event that may introduce two-way risks for the currency. The ANC is in turmoil because of scandals that have shadowed President Jacob Zuma during his eight-year presidency. The party is embroiled in a factional split between supporters of his ex-wife, Nkosazana Dlamini-Zuma, and Deputy President Cyril Ramaphosa, who are the leading candidates to succeed him. Even so, the rand has gained 1.5% against the dollar this year, shrugging off an economy in recession, the firing of finance minister Pravin Gordhan in March, two credit-ratings downgrades to junk, and allegations of corrupt...
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