USD/ZAR may face increased volatility, unlikely to depreciate massively: Commerzbank

The USD/ZAR currency pair may likely face increased volatility over the coming months, in the run-up to significant events – the state of the nation address (February 8), presentation of the budget (February 21) and Moody’s rating decision, but the rand will not depreciate massively, according to a recent research report from Commerzbank.

According to media reports, the 6 members of the ANC national executive committee tried to convince President Jacob Zuma to step down over the weekend, but in vain. An emergency meeting of the ANC's main representatives has been scheduled for today. It is unclear whether the party leadership will succeed in pushing Zuma out of office before his end of the term.

The weekend has shown that Zuma is not willing to give up his post voluntarily. For the ZAR, an end of the Zuma era would be positive. However, the new ANC party leader Cyril Ramaphosa seems to be gaining increasing influence. Ramaphosa not only has an increasing presence on the international scene, he also appointed important managers for state-owned companies and publically voiced his opinion on matters like energy policy in opposition to Zuma.

"In our view, the market will continue to honor the fact that Ramaphosa has begun taking important decisions in the background," the report added.

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