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South African Assets Tumble as Gloom Pervades Fiscal Outlook

  • Country facing credit downgrade after Zuma fires finance chief
  • Government fails to raise full amount in bond auction
Bloomberg business news

South Africa's Zuma Fires Finance Minister Gordhan

Updated on

South African bank stocks tumbled and bonds plunged as the rand headed for its biggest weekly slide since 2015 after the firing of Finance Minister Pravin Gordhan raised concerns about the country’s fiscal path and its investment-grade credit rating.

The rand dropped as much as 2.6 percent before paring the decline to trade 0.9 percent weaker at 13.3995 per dollar by 5:15 p.m. in Johannesburg, heading for a seven-week low. Benchmark 10-year government bonds tumbled the most in seven months, sending the yield soaring by 35 basis points to 8.86 percent, and the government failed to raise the full amount at a scheduled bond auction. An index of bank stocks fell 6.1 percent, the most since December 2015.