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The rand continued its cautious rebound on Wednesday morning after President Jacob Zuma moved to allay fears about the government’s economic policy yesterday.

Mr Zuma prompted a sharp sell-off in South African assets last week with the unexpected sacking of Pravin Gordhan, the internationally-respected finance minister.

Mr Gordhan had been central to efforts to stave off a ratings downgrade last year, but came into frequent conflict with the president due to his efforts to rein in spending and clamp down on cronyism.

However, speaking yesterday after Standard & Poor’s cut the government’s credit rating on foreign-currency debt to junk status, the president stressed that the Treasury’s “policy orientation remains the same“.

The rand reversed its earlier losses to end yesterday 0.53 per cent stronger against the dollar. It gained as much as 1.15 per cent on Wednesday morning, though it later pulled back.

The currency briefly dropped to only a 0.2 per cent rise for the day after Bloomberg reported that the president had survived calls to resign at a key meeting with figures in the ruling African National Congress. At publication time it was up 0.4 per cent, at 13.5595 per dollar.

Markets have been hopeful that the growing backlash against Mr Zuma could lead him to step down as president, though many analysts are sceptical he will be forced to move.

Local bank stocks were still struggling on Wednesday, with the Johannesburg Stock Exchange Banks Index down 1.3 per cent at publication time.

Copyright The Financial Times Limited 2017. All rights reserved.
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