Rand Gains as S. Africa's Top Court to Hear Anti-Zuma Ballot BidBy and
Opposition party asks court to allow secret vote in Parliament
Zuma under pressure to quit after firing finance minister
The rand headed for the biggest gain in almost four weeks as prospects brightened for ruling-party dissenters to join in a vote of no confidence against President Jacob Zuma.
The currency jumped as much as 1.4 percent before trading 1.3 percent stronger at 13.7733 per dollar by 3:18 p.m. in Johannesburg. Yields on benchmark government bonds due December 2026 dropped five basis points to 8.95 percent.
South Africa’s Constitutional Court said it would hear a case arguing for a secret ballot during next week’s vote calling for the removal of Zuma. If the request is granted, it would enable African National Congress dissenters to vote against the president, who roiled markets and earned a downgrade to junk from two rating companies after firing his finance minister on March 31. The ANC has said it wouldn’t allow its members to vote in favor of the motion.
“A secret ballot is a very good thing for the rand because it allows ANC members to vote against President Zuma without fear of upsetting others, raising the chances of the no-confidence motion being successful,” Wichard Cilliers, a Pretoria-based currency trader at Treasuryone Ltd. who recommends a hold on the rand, said by phone. If Zuma remained in the presidency and failed to adhere to fiscal targets, “that would be bad for the economy in the long run,” he said.
The rand has slumped almost 10 percent against the dollar since Zuma recalled then Finance Minister Pravin Gordhan from an international investor road show on March 27 before firing him. S&P Global Ratings cut the country’s credit assessment to junk on April 3, citing policy uncertainty, and Fitch ratings followed suit on Friday. Zuma’s decision sparked calls from members of his own party as well the opposition for his resignation, besides mass protests on April 7.