05/01/2018 08:41 SAST | Updated 05/01/2018 08:41 SAST

Rand Strenghtens To Two Year High On Reports Of Zuma's Recall

Ramaphosa supporters have reportedly told Zuma to step down or risk being recalled.

Siphiwe Sibeko / Reuters
People chat in front of an electronic board displaying movements in major indices at the Johannesburg Stock Exchange building in Sandton Johannesburg July 9, 2015.

The rand stayed firm against the dollar in the wake of reports that President Jacob Zuma had been given an ultimatum – either resign by next Wednesday or risk being recalled by the ANC's national executive committee (NEC), according to Business Day.

The rand reportedly strengthened to its strongest level since June 2015, R12.23 to the dollar.

On Thursday, The Star reported that, according to several NEC members, Zuma was told to resign by next week's meeting on Wednesday or face another motion of no confidence. It was reported that former tourism minister Derek Hanekom was preparing the motion of no confidence. Hanekom brought the previous motion of no confidence against Zuma.

So far, Zuma has survived two motions of no confidence within the NEC and eight in Parliament.

The NEC members, especially supporters of newly-elected ANC president Cyril Ramaphosa, are said to be nervous about the impact of Zuma's various scandals on the national elections in 2019. Ramaphosa supporters are reportedly keen to test their strength in the NEC with a vote against Zuma, but there are also fears that this could cause a backlash, particularly in KwaZulu-Natal where Zuma is popular.

The markets have thus far reacted positively to any news that could point to Zuma's exit. The rand was up by more than 4% when news of Ramaphosa's election broke, the Financial Times reported. And on December 8, when the high court in Pretoria ruled that Zuma could not appoint the head of the National Prosecuting Authority (NPA), the rand strengthened by 66.6% to his R13.64 to the dollar, according to MoneyWeb.