The South African rand has strengthened significantly following president Jacob Zuma’s resignation as head of state, reaching a three-year high of R11.64 against the US dollar.
Zuma resigned on Wednesday night at the Union Buildings after the ANC’s National Executive Committee advised him to do so or face a vote of no confidence in parliament.
The rand, which was trading at around R12 to the US dollar at the beginning of the week, has been strengthening constantly in the past few weeks leading up to Zuma’s exit. However, the overall weakness of the dollar is believed to have also contributed to the strength of the rand.
Analysts expect the rand to move towards R10 to the dollar in the near future under the leadership of Cyril Ramaphosa, whom they believe will restore investor confidence. It is hoped that this will lead to a drop in the prices of fuel, food and other essential commodities.
A new president is expected to be elected on Thursday afternoon.