The rand reversed its early losses to swing into positive territory on Wednesday afternoon after reports that senior members of the country’s ruling African National Congress had moved to block the President from sacking his finance minister.
The currency had weakened as much as 1.3 per cent earlier in the day as traders anticipated the departure of Pravin Gordhan.
Rumours that Jacob Zuma planned to remove his internationally-respected finance minister have been swirling since the president ordered Mr Gordhan to return from an investor trip to London on Monday.
However, local newspaper the Mail & Guardian reported this afternoon that the senior party members including Deputy President Cyril Ramaphosa and ANC secretary general Gwede Mantashe have made clear to Mr Zuma that they are “vehemently opposed” to sacking Mr Gordhan.
The rand quickly reversed its trajectory after the news, turning to a 0.5 per cent gain for the day, to 12.9260 per dollar.
That said, it is still down more than 4 per cent for the week to date, slipping from first to third position in the list of the world’s best-performing currencies over the last year.
The president reportedly suggested replacing the finance minister with Brian Molefe, the former chief executive of national utility Eskom.
Mr Molefe joined South Africa’s parliament only last month, having resigned as Eskom boss after being caught up in a probe into alleged graft and cronyism in the nation’s key institutions. His sudden appointment had already prompted speculation that Mr Zuma would attempt to elevate Mr Molefe to a role in the Treasury.
Mr Gordhan received a standing ovation at the funeral of ANC veteran Ahmed Kathrada earlier today, highlighting his support within at least some sections of the party. Mr Zuma was asked not to attend the event.
Cyril Ramaphosa is one of the frontrunners to replace Mr Zuma as ANC leader later this year. His main rival is expected to be Nkosazana Dlamini-Zuma, the former chair of the African Union commission who was previously married to the current president.