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Rand hits two-week high after court rules Zuma can face corruption charges

Bonds and stocks largely unaffected.

South Africa’s rand climbed to its firmest level in two weeks, driven higher by a court ruling on Friday that upheld corruption charges against President Jacob Zuma, a weaker dollar and a global surge in risk appetite.

At 0820 GMT the rand had raced 0.74% to 13.37 per dollar, outpacing fellow emerging market currencies that made modest gains in early trade.

The rand was on the front in early trade but then raced to a session best 13.36 shortly after South Africa’s Supreme Court of Appeal upheld a ruling by a lower court to reinstate corruption charges against Zuma.

Read: SCA upholds ruling reinstating corruption charges against Zuma

“Today the catalyst for the rand’s positive moves has definitely been that court ruling,” said currency strategist at IG Markets Shaun Murison.

“The strength we saw earlier this week was from external factors and demand for EM’s. Today there is a disconnect with what we are seeing in other emerging currencies and the strength in the rand,” Murison said.

In a list of 17 emerging market currencies tracked by Reuters, the rand was by far the best performer, with only the Russian rouble and Polish zloty the nearest with gains of around 0.2%.

The ruling has piled further pressure on Zuma, who is already facing several scandals. Zuma denies any wrongdoing.

Bonds were unmoved by the court decision, with the yield benchmark paper due in 2026 down 2.5 basis points at 8.65%.

Stocks were steady, with the Top-40 index and the wider All-Share index down 0.1% and 0.08% respectively.

The banking index, considered a barometer of political sentiment, had inched up 0.15%. 

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The ZAR is now nicely ranging back lower in its 13.25 to 13.75 box range. Where are all bearish comments of the ZAR pessimists like fund managers – or are they having distress meetings with management, with regards to the mark-to-market of their offshore investments of the last couple of years?
The longer-term trend of USD/ZAR is much closer to 10 than 20!

‘’There is no sadder sight than a young pessimist, except and old optimist’’
Mark Twain.

Please lock him up for the all suffering South Africans have gone through.

This president has nearly destroyed the economy and country.

He has nearly destroyed everything Nelson Mandela worked for in just 7 years?

I do NOT see the connection (between the court ruling and the rand value). The court ruling is just that … a ruling by the legal people…. with NO bearing on JZ or the economy. JZ will continue to strategize as to how to circumvent the ruling and he will be successful because all he needs to do is keep interdicting, appealing, reviewing judgements, calling for “new presentations” to the NPA, etc. These are options that the law has provided specifically for the rich and powerful so that the latter can avoid prosecution. A poor person stealing a bread gets caught, arrested, held in a police cell, prosecuted, jailed, etc. No such actions are experienced by JZ (and other senior politicos). JZ’s strategy has worked for over ten years (at taxpayers’ expense); it can work for another ten years.

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