South African President Cyril Ramaphosa is considering resigning over an advisory panel’s report that found he may have violated the constitution, according to people familiar with the matter.
Ramaphosa is in meetings with close allies to take advice on the matter, said the people who asked not to be identified as they’re not authorised to speak to the media.
Ramaphosa is “in consultations with a number of stakeholders over the permutations of the panel’s report,” Vincent Magwenya, his spokesman, said in a response to questions sent by text message.
The president will make an announcement on his response to the report, and the presidency “will advise once the time has been confirmed,” Magwenya said.
South African markets trail
The rand weakened as much as 1.7% to an intraday low of R17.49 per dollar on the news and traded at R17.4892 by 13h50. in Johannesburg.
A rapidly expanding political crisis in South Africa kept the nation’s currency and bond markets from joining a global rally fueled by Federal Reserve Chair Jerome Powell’s signals for a slower pace of monetary tightening and bets for a relaxation in China’s Covid policy.
The rand, the worst performer in a basket of 25 developing-nation currencies Thursday, weakened further while South Africa’s 10-year sovereign yield jumped the most since March 2020, after a panel found potential breaches of the constitution over the theft of $580,000 stashed in furniture at a game farm Ramaphosa owns.
Ramaphosa will address the nation on Thursday night, News24, a Johannesburg-based broadcaster, reported on its Twitter account.
Emerging-market currencies and local-currency bonds have started December on a positive note after the biggest monthly advances since March 2016, rallies in which South African assets were a key contributor.
But the political crisis is threatening to undo investor interest in the country considered to be a bellwether for emerging-market risk in general. It may now lose capital flows to faster-growing Asian nations or higher-yielding markets in Latin America.
“South Africa has fallen into a situation where there are concerns about political risk,” said Warrick Butler, the head of foreign-exchange trading at Standard Bank of South Africa. “Exporters pull their offers when they think the rand is vulnerable and that’s exactly what happened now.”
The South African currency declined 1.8% to 17.5157 per dollar as of 1:52 p.m. in Johannesburg, while the 10-year yield increased 51 basis points to 11.31%. The main index for emerging-market currencies rose 0.6%.
The African National Congress’s National Executive Committee will on Thursday discuss the findings by an advisory panel that there may be a case for Ramaphosa’s impeachment. The president may have violated sections of the constitution following the theft of the cash, hidden in a sofa at his farm, its report said.
“The probability of Ramaphosa lasting another full term looks very low to me now,” said Kieran Curtis, director of investment at abrdn in London.
Global stocks, bonds and currencies surged and the haven appeal of the US dollar waned after Powell offered guarded optimism that inflation in the world’s largest economy will slow and said a moderation in rate hikes may come as early as this month. In China, the top official in charge of Covid rules softened her stance.
While the Ramaphosa affair prevented South Africa from following its emerging-market peers higher, the selloff was confined to currencies and bonds. The benchmark equity gauge in Johannesburg climbed for a second day, trading at the highest level since April, although it was off its earlier highs.
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