File Picture: REUTERS
File Picture: REUTERS

The rand pared losses in late trade on Friday, after the National Prosecuting Authority (NPA) decided to reinstate long-standing corruption charges against former president Jacob Zuma.

The move is likely to restore some credibility to the institution long accused of dragging its feet in pursuing cases involving politically connected individuals.

"I would have expected the rand to react a little more forcefully on the news, which I think is positive. It gives credibility to the judiciary and the rule of law," said Luke Alers, CEO of Kaon Capital.

The rand strengthened a few cents to the dollar as the NPA boss read his statement at the media briefing.

Zuma was forced to resign in February, by his own party, more than a year before the next general election. His two terms of office were marred by scandals, which cost the ANC key metros during the 2016 municipal elections.

On the global front, US import tariffs remained a political hot potato — a development that threatens to hurt global trade.

In the past week, US President Donald Trump slapped import duties on steel and aluminium, a move that is likely to trigger a backlash from affected countries.

TreasuryOne currency dealer Andre Botha expects the pressure on the rand not to let up until next week, when SA’s sovereign debt ratings will come up for review by Moody’s.

Moody’s is the only major ratings agency to still rate SA’s debt at investment grade, after S&P Global Ratings and Fitch lowered it to junk in 2017.

Any further downgrade will automatically be a universal one, in which case the country’s debt would be excluded from the Citi World Government Bond Index.

At 4.22pm, the rand was at R11.9584 to the dollar from R11.9006, R14.6852 to the euro from R14.6441 and at R16.6498 to the pound from R16.5887.

The euro was at $1.2281 from $1.2305.

© Business Day

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