Deputy President Cyril Ramaphosa’s win at the African National Congress’ (ANC) elective conference on Monday evening pushed South Africa’s currency to trade at a nine-month high.
Even before his announcement as the new leader of the ANC, markets appeared to favour a win for him and saw the rand trading at R12.52 to the dollar, the firmest it’s been since March 27, 2017, Eyewitness News reports.
Ramaphosa, 65, was very active with the trade union movement – even being part of the founding of South Africa’s largest trade union the National Union of Mineworkers (NUM) – before venturing into business and becoming one of the richest people in South Africa.
The rand held onto the gains it made following the announcement, trading 2.6 percent firmer at R12.75 in the evening.
“Markets are taking the view that rating downgrades in late February to early March, when the Moody’s review is due, may not happen, at least at that review, and there is a greater chance of political reforms as Ramaphosa does have a strong market track record,” UBS London strategist Manik Narain said.
Ramaphosa has also vowed to fight corruption and revitalise the economy, which has been met favourably by foreign investors.
“There are some questions as to how much further the market can go from here as it’s still likely to be a divided ANC,” Narain did point out.
Ramaphosa beat main rival former African Union chairperson and member of Parliament Nkosazana Dlamini-Zuma to the post of leading the country’s ruling party.
He now faces the mountain of having to restore unity to a party divided by factions and tainted by accusations of graft and corruption.