The rand was on the defensive at the start of the week‚ which will mostly likely be dominated by the standoff between Finance Minister Pravin Gordhan and the National Prosecuting Authority.
Rand Merchant Bank currency strategist John Cairns said: "At first glance‚ the news flow is rand-negative: the risks have led to aggressive and continuous foreign selling of local assets‚ and there is surely reduced scope for the reforms needed to avert a downgrade."
Foreign investors offloaded a net R13.06bn in local bonds and equities last week when fraud charges were levelled at Gordhan‚ who said they were politically motivated.
S&P Global Ratings‚ which has the country’s foreign currency rating at just one notch above subinvestment grade status‚ will review its decision on December 2.
The credit downgrade has negative knock-on effects‚ which includes high cost of state borrowing.
The rand has also been affected by the rising dollar on bets of interest-rates increases in December.
At 9.04am‚ the rand was at R14.3281 to the dollar from Friday’s R14.2633. It was at R15.7420 to the euro from R15.6401 and R17.4637 to the pound from R17.3295.
The euro was at $1.0987 from $1.0969 previously.
– TMG Digital/BusinessLIVE
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