Over the last fortnight alone we have seen GBP/ZAR exchange rates move by over 10% which is the difference of ZAR155,000 on a currency transfer of £100,000. The reason for the huge movement is that again South African politics is hitting the headlines. The Finance Minister Pravin Gordhan was sacked recently and has been replaced by Malusi Gigaba. However, a recent survey produced by research firm Kantar TNS has suggested that 7 out of 10 South Africans believe that the current President Jacob Zuma should step down.
Up until recently the Rand has been rather strong versus the Pound, boosted by strong commodity prices and increased global demand but the recent political turmoil and exaggerated market movement has shown how unstable the South African economy can be at times.
South Africa has had its credit ratings downgraded by Standard & Poors which has rocked markets although the African National Congress have publicly backed Zuma. With his current term due to end in 2019 if we see further instability then I would expect to see the Rand to experience even more problems. Another ratings agency Moody’s is also likely to downgrade South Africa. However, in the short term often what goes up in such a quick period will suddenly reverse the movement so if you’re considering buying South African Rand at the moment then this might be a good opportunity.
The approval ratings for South African President Jacob Zuma are now at their lowest level since 2009, with 7 in 10 South Africans believing he should step down.
Indeed, with such large movement over the last few days it may be worth considering a Limit Order. Placing a Limit Order means that when the market moves to your specified rate, our system automatically purchases your currency, letting us work as your eyes and ears in the market.
To learn about on how these political events in South Africa could impact your future requirement, call us on 01494 725 353 or email me here.
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