IT is with uncanny ability that SA’s politicians deal the beleaguered economy yet another blow, just when it appeared as though things were settling down. President Ramaphosa has just announced that the ANC will be looking to change the constitution after all to more explicitly allow for expropriation of land without compensation.
Whilst the market was shaping up for a break below the R13.00 handle, this news has dealt the ZAR a blow and in all likelihood the news will not be well received. This latest move is once again believed to be politically motivated ahead of the National Elections next year and is aimed at neutering the political stance of the EFF.
USD-ZAR responded immediately to the news and there is a high probability that it will likely weaken further. If communicated poorly this holds the potential of turning into a game changer depending on how seriously foreigners view this threat to property rights more generally. Currently USDZAR trading at R13.28