Rand retreats from R12/$ as market awaits further news on Jacob Zuma
The rand was slightly softer against major global currencies on Monday afternoon, paring some of the gains made at the weekend, following reports that President Jacob Zuma was on his way out.
The rand reached an intraday best of R12.01/$, having last traded under this level in May 2015.
Since Friday, the local unit has been bolstered by a raft of factors, notably reports of an agreement within the ANC that President Jacob Zuma step down.
On Monday, however, the ANC denied that any resolution had been taken to remove Zuma.
Further developments included the appointment of a new board at Eskom, while ANC president Cyril Ramaphosa has been seen to have tightened his grip on key structures within the party.
This bolstered confidence that SA’s government may crack down on corruption and shift to more market-friendly policies, analysts said.
An early Zuma exit could see the rand strengthen to R11.70/$, and then move towards R11, providing that Ramaphosa could assume the presidency without any political conditions that hampered reform efforts, said Investec Bank economist Annabel Bishop.
The dollar was also under some pressure, as a US government shutdown heads into a third day.
At 3pm the rand was at R12.1016 to the dollar from R12.0556, at R14.8142 to the euro from R14.7917 and at R16.8121 to the pound from R16.7499.
The euro was at $1.2242 from $1.2272.