The Rand has weakened over the past 24 hours, with the currency trading at nearly R18 against the dollar after the Independent Parliamentary Panel released its report on the ‘Phala Phala’ affair, confirming that the leader of the state would have violated the Constitution and the law of the land.
Independent researcher and economist Dale McKinley said investors can expect a “bumpy ride” for the Rand in the coming weeks following the latest political developments in the country.
He explained that global currency markets tend to react strongly when there is some form of unpredictability, which is reflected in the local currency.
Stressing that the factors that were supporting the rand had disappeared, Mr. McKinley noted that the weakening of the South African currency “will probably continue to lose its value for some time, regardless of what happens to President Ramaphosa”.
In this regard, he pointed out that the South African economy is facing many other challenges such as rising interest rates, inflation, as well as the slowdown in the Chinese economy.
Same story with academic Bonke Dumisa, who said the local currency has faced a huge loss in the wake of the country’s political challenges, warning that this instability will continue to affect the rand in the world. ‘coming.
Earlier in the day, the Federation of South African companies “Business Unity South Africa” (Busa) stressed that the confirmation of criminal charges against President Ramaphosa constitutes a blow for the country’s economy.
“The report’s findings on the theft of large sums of foreign currency from the private Phala Phala farm owned by Mr. Ramaphosa pose a high risk that investor confidence will be further eroded and the already unstable political climate will continue to deteriorate” , BUSA said in a statement.
The employers’ organization also pointed out that the country needs a clear direction in the coming days, in order to send a positive message to citizens, investors and businesses.