JOHANNESBURG – The rand rallied to its strongest position against the US dollar in a month following the announcement that charges against Finance Minister Pravin Gordhan have been dropped.
This has been widely welcomed, but some experts warn the currency remains vulnerable.
Economist Iraj Abedian says National Prosecuting head Shaun Abrahams, together with what he calls his “political handlers” and the Hawks should be held responsible for the weakening of the local currency.
“It’s really a case of ‘with friends like this, you don’t need enemies’. The South African economy is battered by such individuals, and they cannot just occupy the office and do this subversion of national interest day-in-and-day-out, get paid for it and just get away with just a single admission of error of judgement.”
Economist Dennis Dykes adds that while the news is positive, South Africa still has a long road ahead.
“We’ve got, for example, the Public Protector’s (state capture) report which we hope will have a similarly positive outcome and then we have the ratings agencies later in the year and their assessment of what’s going on – but obviously the less in the way of political noise, the more we get back to a normal society, the better the markets will behave.”
Yesterday’s events come against the backdrop of Standard and Poor’s global ratings’ engagement with the National Treasury over the next month ahead of its credit rating decision in December.