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Rand slips on investigation into Ramaphosa campaign donation

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South African President Cyril Ramaphosa delivers a speech during the International Labor Organization (ILO) International Labour Conference on June 10, 2019 in Geneva. – The head of the ILO urged the agency to approve new rules to stop violence and harassment in the workplace, which have faced resistance from employer representatives. ILO director general made the call as he opened a congress marking the United Nations labour body’s 100th anniversary. (Photo by Fabrice COFFRINI / AFP)

South Africa’s rand slipped on Thursday, as investors were unnerved by an investigation into a donation for President Cyril Ramaphosa’s 2017 campaign, leader of the governing African National Congress (ANC) party.

Ramaphosa has said he will cooperate with the investigation into whether he misled parliament over the donation, made by the head of services company Bosasa, and analysts say there is no immediate risk that he could be removed from office.

But the anti-corruption watchdog’s investigation increases political uncertainty at a time when the economy is performing poorly.

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At 0710 GMT, the rand traded at 14.90 versus the dollar, 0.2 per cent weaker than its previous close.

Government bonds also fell, as the yield on the benchmark 2026 bond rose 3.5 basis points to 8.40 percent.

“The Bosasa scandal is the main factor driving a deterioration in risk sentiment,” said Lloyd Miller, an analyst at ETM Analytics. Nedbank CIB analysts also cited the Bosasa scandal among factors weighing on the rand.

Stocks on the Johannesburg bourse opened with little change, as the All-share index was flat in early trade.


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