JOHANNESBURG – South Africa’s rand tumbled to its weakest in three weeks on Tuesday as deputy president David Mabuza was sworn in as a lawmaker after being cleared by the ruling African National Congress of bringing the party into disrepute.
At 1700 GMT the rand was 2.15 percent weaker at 14.7350 per dollar, its weakest level since March 28, after opening at 14.4225, with news of Mabuza’s swearing in adding to a risk-off tone globally after trade tensions resurfaced.
The move clears the way for 58-year-old Mabuza, an important ally of President Cyril Ramaphosa, to remain his deputy, but again throws a spotlight on corruption allegations that have hit the party’s popularity. Investors are keen to see proof of Ramaphosa’s clean governance pledge.
“We were incomplete. We are complete now,” Ramaphosa said while congratulating Mabuza after he was sworn in.
Mabuza denies any wrongdoing, and has said he wants all the allegations levelled against him to be tested in a court of law.
“The rand outperformed its EM peers last week after elections and was able to hold onto those gains because of the positive politics and expectations about the new cabinet,” said BNP Paribas analyst Jeffrey Schultz.
“We’ve had delays to that announcement because of the Mabuza issue so that outperformance has been eroded. The market is anxious to see how small cabinet is going to be and what key appointments like the finance ministry are going to be.”
The ANC easily won this month’s general election, but its vote dropped sharply due to anger over corruption scandals. – Reuters
