Were Pravin Gordhan to actually be removed, we think that the rand could fall by another 5% against the USD. Even if he receives another stay of execution, economic factors will cause the currency to weaken over the duration of this year. The South African rand sold off yesterday after respected finance minister Pravin Gordhan was suddenly recalled from a London investor roadshow by President Jacob Zuma. The currency fell by 3% against the USD. It dropped by another 1.7% today after reports that President Zuma told political allies that he plans to sack the minister, who is seen by the markets as a rare defender of fiscal discipline.
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