Rand gains on rumours of possible Cabinet reshuffle
The rand was firmer against the dollar on Friday afternoon amid speculation that a Cabinet reshuffle by President Cyril Ramaphosa was imminent.
Although a reshuffle will present Ramaphosa with the opportunity to remove inefficient ministers, expectations are that he will proceed cautiously, as the newly-elected president seeks to consolidate his authority in the ANC and the government.
The local currency also continued to find support from the easing of fears of further downgrades of SA’s sovereign debt rating.
On Thursday, the Treasury said all three major global ratings agencies had given positive feedback on the tabling of the budget earlier this week.
Nedbank Corporate and Investment Banking analysts said they expect the rand to hit R11.30/$ following Wednesday’s budget.
Over the short-term rand weakness on the approach to 12/$ could fade in the first quarter of 2018, but the rand was expected to trade closer to R12.50–R13/$ at the end of 2018, Nedbank said.
At 3pm the rand was at R11.5744 to the dollar from R11.6558, at R14.234 to the euro from R14.3736 and at R16.1924 to the pound from R16.2642.
The euro was at $1.2298 from $1.2331.
The dollar rose further after this week’s US Federal Reserve minutes revealed confidence in the economy and raised the prospect of interest rates increasing more than previously thought, Dow Jones Newswires said.