THE South African rand rallied on Thursday as the governing African National Congress (ANC) stood by a decision to suspend one of its top officials charged with corruption and global risk appetite was strong.
At 1620 GMT, the rand ZAR=D3 traded at 14.2200 against the dollar, up roughly 1% on the day.
Other emerging market currencies, including the Russian rouble RUB= and Turkish lira TRY= , also gained as investors took comments by Federal Reserve officials on Wednesday to mean that U.S. interest rates would stay low despite the risk of higher inflation.
The ANC’s move earlier this week to suspend its Secretary General Ace Magashule, one of reform-minded President Cyril Ramaphosa’s main rivals, has boosted the rand as it is seen as a sign that Ramaphosa is in the ascendancy in his divided party.
Magashule is attempting to appeal his suspension and denies the corruption charges he faces.
But an ANC spokesman said on Thursday that Magashule’s attempt to retaliate by suspending Ramaphosa had not worked and that Magashule remained temporarily stripped of his duties.
Investment bank UBS said in a note that the ANC ructions were among factors to watch, while the weak state of public finances remained as risks for the rand.
Johannesburg-listed stocks rose slightly on Thursday, with the Top-40 Index .JTOPI closing 0.28% higher at 61,706 points and the All-Share Index .JALSH up 0.39% at 67,609 points.
Gold miners, bolstered by rising prices for the precious metal, were among the biggest winners of the day, led by a 3% gain in both AngloGold Ashanti ANGJ.J and Gold Fields GFIJ.J .
Gold Fields on Thursday announced plans for big capital spending in 2021 and said its production guidance for the year remained unchanged.
Other industries like financial firms and retailers saw their shares boosted by the stronger rand.
Government bonds edged higher, with the yield on the 2030 instrument ZAR2030= dropping 4 basis points to 9.08%.
- Reuters
