05/04/2017 14:34 SAST | Updated 05/04/2017 14:51 SAST

Rand Slumps Further As Zuma Seemingly Survives Calls To Step Down

The rand fell 1,1 percent against the dollar after ANC leaders backed down on their calls for Zuma to quit.

Reuters Photographer / Reuters
An employee at the Johannesburg Stock Exchange chalks up share prices.

The rand weakened further on the back of President Jacob Zuma's fightback, falling 1,1 percent to R13,77 to the dollar at 11.22am in Johannesburg.

This reverses an earlier gain of 1,1 percent as the market rallied on the back of a growing campaign -- backed by senior ANC leaders -- for Zuma to step down after his controversial firing of finance minister Pravin Gordhan.

The market reacted negatively after three of the top six -- deputy president Cyril Ramaphosa, secretary general Gwede Mantashe and treasurer general Zweli Mkhize -- said that they made a "mistake" by publicly criticising President Jacob Zuma following his Cabinet reshuffle.

By all appearances, Zuma successfully fought back on calls for him to step down during a special extended ANC National Working Committee on Tuesday night.

"Officials had a candid report on serious issue disagreements, it was a mistake that must not to be committed again," Mantashe said.

During the week of the Cabinet reshuffle, the rand lost more than eight percent of its value and on the morning Gordhan's sacking was announced, it reached R13,60 to the US dollar.

The falling value of the rand and the seeming inability of the ANC to remove Zuma is likely to mean a further downgrade of the country's credit status by Moody's –- currently conducting a review –- after S&P this week downgraded South Africa to junk status.

Bloomberg said the decision of three of the so-called top six to back down on their criticism of Zuma will increase chances that he will survive a vote of no confidence currently being considered by Parliament's speaker Baleka Mbete:

"The decision heightens chances that Zuma will survive an opposition-sponsored vote of no confidence in parliament if the leadership of the National Assembly allows it to go ahead. It came in the face of widespread criticism of Zuma's cabinet changes that prompted S&P Global Ratings to downgrade the nation's credit rating to junk and weakened the rand.

Zuma would have lined up support in expectation of a backlash to his sacking of Gordhan, Bloomberg reported, quoting Ralph Mathekga, a political analyst at the Mapungubwe Institute for Strategic Reflection, a Johannesburg-based research group:

"Zuma would not carry out a controversial cabinet reshuffle such as this one without lining up his support within the party to push back against the backlash. Even if you have those members speaking openly against him, the balance is such that he's still quite firm within the party."