30/03/2017 22:57 SAST | Updated 31/03/2017 00:18 SAST

Rand Hits Three-Week Low On News Of A Cabinet Reshuffle

The rand fell shortly after news of the possible reshuffle of the executive start circulating just before 9pm.

Siphiwe Sibeko / Reuters
South Africa's Finance Minister Pravin Gordhan walks with his deputy, Mcebisi Jonas as they walk from their offices to a court hearing in Pretoria, South Africa, March 28,2017.

The rand's value to the dollar immediately dropped upon reports that President Jacob Zuma had possibly fired nine cabinet ministers and six deputy ministers, after being locked in an urgent meeting with the rest of the top six in Pretoria on Thursday.

News of the possible reshuffle of the executive start circulating just before 9pm, South African time. Shortly after the rand immediately fell from R12.94 to R13.13 to the dollar -- its highest for the day. Just after 10pm it dropped further to R13.29 where it continued to hover ahead of the expected announcement.

The value is a three-week low, and the weakest value for the rand against the dollar since March 10, 2017.

"The rand is not resilient. We have a weak currency, and it's been weak since Jacob Zuma became president. We are paying a huge price as South Africa because of the quality of South Africa's political leadership," economist Dawie Roodt told eNCA on Friday. He said the rand may not completely "bomb out" but may recover once the news is over as things would stabilise and the past period of uncertainty would be over.

Several reports circulated on Thursday night that President Jacob Zuma has summoned the rest of the ANC's top six to an urgent meeting in Pretoria. News24 reported:

The officials, Cyril Ramaphosa‚ Baleka Mbete‚ Gwede Mantashe‚ Jessie Duarte and Zweli Mkhize, were called to a meeting at short notice to the presidential home, Mahlambandlopfu, at 18:30.

Some ministers were informed to be on standby.

It is understood that nine ministers, including Finance Minister Pravin Gordhan, and six deputy ministers will be affected by the reshuffle.

ANN7 reported the same news, celebrating the imminent reshuffle and even reporting it as fact. The station is owned by the Gupta family who are closely affiliated to Zuma.

The South African Communist Party (SACP) earlier on Thursday said it was informed by President Jacob Zuma of his intention to axe Finance Minister Pravin Gordhan and his deputy, and the party disagreed with the move.

Speaking at a briefing on Thursday morning at their headquarters in Braamfontein, Johannesburg, SACP second deputy general secretary Solly Mapaila had high praise for Gordhan, saying he should not be fired.

"Comrade Pravin has run that ministry with absolute cleanliness. That is what has impressed us: it is one of the best-run departments. Other ministries should be emulating it. For us as the SACP governance, and clean governance in particular, has become a critical pillar of the national democratic revolution at this current period."

There has been increasing opposition to Zuma following a pivotal moment of resistance at the funeral of struggle veteran Ahmed Kathrada on Wednesday, the day before.

There were plenty of hints around dissatisfaction with Zuma and his leadership, including a heavy-hitting speech by Nzimande, general secretary of the South African Communist Party.

But former president Kgalema Motlanthe's eulogy contained the most hard-hitting criticisms of Zuma, using Kathrada's own words calling for Zuma to step down to thunderous applause — including from his own ministers.

Rumours that Zuma was about to reshuffle his Cabinet, specifically removing Gordhan from his post, have being doing the rounds for well over a year.

Curious charges hung over Gordhan's head for months, until they were finally dropped in October last year, leading to rumours that the charges were trumped up to be used by Zuma as a premise for sacking the finance minister.

But the speculation reached fever pitch on Monday when Zuma instructed Gordhan to return home from an investor roadshow.

Zuma faces a rebellion within his own party if he fires Gordhan, with about 12 ministers considering resigning their positions and then fighting for the president's removal, according to four people familiar with the situation, News24 reported. The site added:

Deputy President Cyril Ramaphosa and some deputy ministers may also resign, the people said, asking not to be identified because the information isn't public. The officials would keep their seats in parliament and possibly support or abstain from a vote of no confidence in the president if it's called by the opposition or by members of the ANC, they said.