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South Africa’s rand is steadying in Asia trading after a cut to the country’s credit rating by S&P pushed its exchange rate against the dollar as much as 2.5 per cent weaker on Monday.
The rand was trading just 0.2 per cent softer at 13.7120 per dollar on Tuesday morning after closing Monday’s session down 2 per cent.
That still leaves the currency 5.1 per cent weaker against the greenback since President Jacob Zuma fired finance minister Pravin Gordhan alongside eight other ministers in a late-night cabinet reshuffle on Thursday intended to purge growing numbers of the president’s critics.
In its analysis accompanying S&P’s downgrade of the long-term foreign currency sovereign credit rating to BB+ (down from BBB-), the ratings agency cited political and institutional uncertainty as grounds for its negative outlook, saying that “the executive changes initiated by President Zuma have put at risk fiscal and growth outcomes.”