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Rand slides over Nene crisis, stocks hit 6-month lows

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The rand weakened several percent?on Monday with a newspaper claim that finance minister Nhlanhla Nene had asked President Cyril Ramaphosa to sack him rocked the currency.

Stocks dipped recommended to their lowest since early March led by gold and banks shares, tracking the weaker currency.

The rand trimmed a few of its losses to trade 0.58% weaker at 14.8800 per dollar at 1557 GMT, having hit a session low of 14.9875 at the beginning of trade following Business Day newspaper citing government sources as saying Nene had asked President Cyril Ramaphosa to be sold from his position.

Ramaphosa’s spokeswoman told Reuters his office weren’t aware of Nene’s request.

Last week Nene told an inquiry into government corruption he had made numerous visits to the Gupta family, friends of former leader Jacob Zuma accused of unfairly winning state contracts and influencing the firing of ministers. Both Zuma and also the Guptas have denied any wrongdoing.

Nene is because read the mid-term budget later this month.

Moody’s is scheduled to evaluate its rating on Friday, and Nene’s departure risks rattling fragile investor sentiment towards an economy in recession.

“The main selling reaction about the rand on reports it really is finance minister has asked to be sacked will encourage investor caution that South Africa might be in store for an additional round of political risk,” said Jameel Ahmad, head of currency strategy at FXTM.

South Africa has experienced three ministers in the past couple of years, with rand and bonds reacting badly towards upheavals.

Bonds also slumped, together with the yield over the benchmark paper due in 2026 up 6 basis suggests 9.3%.

On the bourse, the All-Share index fell 0.35% to 54,219 points as the blue chip Top-40 index fell 0.45% 48,042 points.

Banks were down 0.44% as well as the gold index fell 1.07% to R1 032.

MTN bucked fashionable, rising 2.6% following the Nigerian central bank said it may decrease the amount it’s ordered the telecoms firm to repatriate.

“We remain plagued by america policy decisions and locally, the weakened rand and political uncertainty continue to weigh on local stocks,” said Ferdi Heyneke, portfolio manager at Afrifocus Securities.

Gold fell partly over the back of gains during the dollar that is certainly benefiting from a run of strong US economic data reinforcing expectations of further interest rises.?

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