Rand weakens after public protector calls for Bank to ditch currency protection

The rand was weaker against major global currencies on Monday afternoon‚ after risk spiked following a call by Public Protector Busisiwe Mkhwebane for a change in the South African Reserve Bank’s mandate.

The requirements for a constitutional change that would shift the Reserve Bank’s mandate from protecting the value of the rand in favour of the socio-economic wellbeing of citizens was unlikely‚ Nomura’s emerging-markets investment economist Peter Attard Montalto said.

It was‚ however‚ "a livewire issue‚ even if a change here is not likely to actually occur‚ the risk of it is important to markets and ratings agencies"‚ said Attard Montalto.

At 3.30pm the rand was at R12.9643 to the dollar from R12.7844‚ R14.4895 to the euro from R14.3572 and R16.549 to the pound from R16.3178.

The euro was at $1.1176 from $1.1208.

Mkhwebane made the comments at a briefing in which she also ordered a re-opening of investigations into apartheid-era transactions between the state and Absa Bank. Absa‚ which has not yet seen the report that contains the order‚ said it would study it before a possible legal review.

Earlier on Monday‚ the rand had been stable at weaker levels ahead of local economic data and international events expected later in the week.

Momentum SP Reid analysts said the rand encountered selling pressure in recent sessions as a result of a combination of weaker global commodity prices and the release of a new version of the Mining Charter‚ which undermined the currency.

The new charter has called for more stringent requirements for black ownership of local miners. The Chamber of Mines has indicated that it will seek to review the charter‚ citing a lack of consultation.

- BusinessLIVE