The South African rand has strengthened past 13 per dollar for only the second time since Jacob Zuma sacked his finance minister in March, after reports suggested the president himself could be on the way out amid growing pressure from within the ruling African National Congress.
Bloomberg reported yesterday that the ANC’s National Executive Committee will discuss the option of removing Mr Zuma at a meeting this weekend, prompting a rally in the currency that continued into Wednesday morning.
At publication time, the currency was 0.6 per cent stronger for the day, at 12.9922 per dollar.
Piotr Matys, emerging markets forex strategist at Rabobank, warned against getting “carried away” by the latest reports, which were quickly denied by an ANC spokesperson. However, he added that “every day more cracks seem to be appearing on Zuma’s previously strong position”, which is likely to encourage further strengthening in the rand.
Attacks on Mr Zuma from within the ANC have increased as various figures position themselves ahead of leadership elections later this year. Mr Zuma’s term as president runs until 2019, but the ANC will pick a new party leader in December, and some analysts have predicted increased “factionalism” in the months to come.