Rand market looks to ANC leadership for direction
IOL / 15 JANUARY 2018 - 06:30AM / SIZWE DLAMINI
JOHANNESBURG - While a number of organisations welcomed many of the commitments made by ANC president Cyril Ramaphosa at the party’s 106th anniversary celebrations, rand daily moves hardly reacted to speculation on leadership changes, with the rand/dollar rate remaining flat at around R12.40.
The ANC president put the country’s economy at the centre of his address when outlining the party’s organisational plans.
Image - IOL
Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions, said it seemed as though the forex market was very wary of mainstream news and the data it chose to respond to in the wake of the “fake news” incident concerning the fate of President Jacob Zuma.
“The rand’s range for the time being remains within the R12.35 to R12.55 band. A move to oust Zuma would see the rand strengthen in the short term, opening up a break below the R12.20 mark,” said Botes.
On Friday the rand was bid at 12.4186 to the dollar, compared with 12.4392 on Thursday.
The market was desperately looking for some direction from the ANC, and trading of the rand will stay subdued as long as the political landscape remained in limbo, she added.
Botes said: “The World Bank’s 1.1percent forecast gross domestic product growth for the country could very well be adjusted downward should Zuma remain in power and the ANC fail to provide sufficient grounds for South Africa to avoid a downgrade by ratings agency Moody’s.” Botes said the governing party needed to offer strong pro-economic growth policies to balance the reaction to populist policies demanded by the Zuma faction and ensure some economic recovery.
In his statement Ramaphosa addressed, among other things, the concentration of ownership in the country’s economy and how the party intended to address the issue. He said the country needed to pursue a multifaceted growth strategy in order to promote job creation on a far larger scale.
“We need to revitalise our manufacturing sector through a number of measures, including preferential procurement in both the public and private sectors, to stimulate demand for local goods and to reduce domestic manufacturing costs.”
Cosatu said on Saturday that, as workers, they supported the plan to reduce the concentration of ownership and control in the economy by expanding the mandate of the competition authorities. “We also agree that state procurement and the award of concessions should be used more effectively to promote broad-based black economic empowerment and greater worker ownership.
“We have noted that the ANC call for a social pact between the government, labour, business and communities urgently to reignite economic growth and accelerate the process of transformation.
“We accept this proposal as long as it is not premised on the understanding that workers will be expected to carry the burden through restricted or no pay increases,” said the workers’ confederation.
The SACP said that what must be attended to were the immediate needs of the people, the majority of them the working class and poor.
“We must, at the same time, take care of their future. The majority of our people live under conditions of high levels of class, race and gender inequality, unemployment, poverty and social insecurity.
“These problems, which must come to an end, are a direct result of dispossession and economic exploitation. They are also a direct result of the exploitation of our basic national wealth, including land and other natural and public resources,” the SACP said.
LINK : https://www.iol.co.za/business-report/economy/rand-market-looks-to-anc-leadership-for-direction-12727111
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