The South African rand is continuing its slide against the dollar after President Jacob Zuma narrowly won a motion of no-confidence on Tuesday.
The rand had rallied in the run-up to the vote, reflecting investor expectations that the ballot could bring an end to Mr Zuma’s scandal-prone premiership and the country’s stagnating economy.
But after Mr Zuma won his vote of no confidence by 21 votes, the rand took a leg down, and has continued its slide on Wednesday in generally nervous market conditions. At pixel time, it is down 0.7 per cent against the dollar, and is down 1.7 per cent since yesterday.
Analysts at Citi warned the rand was likely to “take on more water over the next few weeks” after Mr Zuma’s narrow win, as “the tactical opportunity has passed and the challenges associated with credit rating updates, fiscal slippage and political brinkmanship loom large.”
They also warned the political chaos in the country may not be over yet. “While the outcome means President Zuma remains in place until December 2017′s ANC elective conference, we believe the results reveal how unpopular he has become,” they added.
“The reality is that local politics could heat up over the next few months and yet another unsuccessful motion of no confidence against President Zuma might still embolden the pro-Zuma faction.”