NEWS

Rand Falls Almost 2 Percent After Gordhan's Call-Back From The UK

S&P Global Ratings and Fitch Ratings both rank SA one level above junk, while Moody's puts it two notches higher.

27/03/2017 12:38 SAST | Updated 27/03/2017 12:42 SAST
Mike Hutchings / Reuters

The rand fell as much as 1,7 percent on Monday after President Jacob Zuma told Finance Minister Pravin Gordhan and his deputy, Mcebisi Jonas, to return to South Africa immediately.

Bonds weakened sharply, while banking shares on the Johannesburg bourse fell more than 2 percent.

Africa's most industrialised economy escaped being downgraded to junk status last year. S&P Global Ratings and Fitch Ratings both rank the sovereign one level above junk, while Moody's puts it two notches higher.

Moody's, which put South Africa on negative watch in its latest review, is due to revisit that on April 7, followed by S&P at the beginning of June.

Weak economic growth and tensions within the ruling party African National Congress (ANC) have put South Africa's investment grade credit rating at risk.

Gordhan's team on the trip to London, Boston and New York included Jonas and Treasury director-general Lungisa Fuzile, as well as business executives and union leaders.

"President Jacob Zuma has instructed the Minister of Finance, Mr Pravin Gordhan and Deputy Minister Mcebisi Jonas to cancel the international investment promotion roadshow to the United Kingdom and the United States and return to South Africa immediately," the presidency sent out in a statement on Monday.

Appointed in late 2015 after a predecessor's sudden sacking, Gordhan was in London for the first leg of a week-long non-deal investor roadshow in Britain and the United States.

ll-Back