JOHANNESBURG – South Africa’s rand rose on Monday and government bonds firmed on hopes Deputy President Cyril Ramaphosa will win the race to become the next leader of the ruling African National Congress (ANC) party.
Votes were being counted after ANC delegates voted on Monday to select between Ramaphosa, who is favoured by markets, and former chair of the Commission of the African Union Nkosazana Dlamini-Zuma – Zuma’s ex-wife and his preferred candidate – as new party leader.
At 1039 GMT, the rand was traded at 12.9800 per dollar, 0.84 percent firmer than from its close on Friday, after earlier racing to a 3-1/2-month high of 12.7300 earlier.
“The rand is considerably stronger than where it was last week,” said IG Markets currency strategist Shaun Murison. “I think a Cyril Ramaphosa win is priced in.”
In fixed income, the yield for the benchmark government bond due in 2026 was down 11 basis points at 8.965 percent, reflecting firmer bond prices.
Markets volitity was expected ahead of the announcement of the ANC vote results, which were expected later on Monday.
“For all those who hold ZAR positions, today’s motto is: please fasten your seatbelts! The expected outcome of the vote at the ANC Congress is likely to create volatility in ZAR exchange rates,” Commerzbank analysts in a note.
On the stock market, the Top-40 index was up 0.45 percent while the broader all-share gained 0.71 percent.