S.Africa's rand extends losses as speculation Ramaphosa may be fired weighs

S.Africa's rand extends losses as speculation Ramaphosa may be fired weighs
Photo illustration of South African bank notes displayed next to the American dollar notes in Johannesburg
JOHANNESBURG (Reuters) - South Africa's rand weakened on Friday, pressured by a firmer dollar and underperforming emerging market peers as speculation that President Jacob Zuma may axe his deputy Cyril Ramaphosa weighed on sentiment.

At 0830 GMT the rand was 1.15 percent weaker at 13.6725 per dollar, extending losses and breaking through the 13.60 support level as renewed bets of fiscal stimulus in the United States saw a return of dollar bulls.

Answering questions in parliament on Thursday about whether he may be sacked, Ramaphosa, a frontrunner in a December African National Congress (ANC) leadership contest, said he couldn't speculate on rumours.

Political analyst Daniel Silke said that if Ramaphosa were fired, it would be viewed dimly by investors.

"Any further intelligence report used to undermine a political enemy or promote his favoured candidate by undermining the chief rival would have little credibility. Both the public and those inside the ANC would be very sceptical," Silke said.

The rand is at its weakest since Oct. 11 and is likely to remain under selling pressure ahead of Finance Minister Malusi Gigaba's maiden budget speech on Oct. 25.

Zuma reshuffled his cabinet for the second time in seven months on Tuesday, appointing a close associate to oversee a big nuclear power deal, adding to political instability ahead of an ANC leadership election in December.

Bonds also weakened, with the benchmark paper due in 2026 up 4.5 basis points to 8.84 percent, its highest level sine July 12.

Stocks were higher in early trade, with the JSE securities exchange's Top-40 index up 0.5 percent and the wider All-Share index up 0.46 percent.

(Reporting by Mfuneko Toyana; Editing by Joe Brock and Hugh Lawson)

First Published: 2017-10-20 09:28:28
Updated 2017-10-20 11:55:26

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