Rand takes its biggest loss in 6 years, in Phala Phala aftermath
As expected, the Rand fell almost uncontrollably today due to the adverse findings of the independent panel into the Phala Phala debacle.
The Rand has lost almost $1, the most in six years, in what appears to be the fallout of the Phala Phala report that found that the president probably contravened the Constitution, trading at R17,95 after the resignation rumours started.
And things may get even worse, as talk of President Cyril Ramaphosa resigning gains in momentum and could see even further declines.
Rand declines by more than 3%
At lunch time the Rand was down 3.16%, trading at R17.71, its worst day since early May, according to Moneyweb. It has since decreased to R17,61 to the Dollar, but is expected to fluctuate as new developments emerge.
The local currency traded at R16,98 against the Dollar before the report was made public on Wednesday night and weakened by 5.4% since.
The Rand was just regaining its stability after reaching its lowest level in 52 weeks on 3 November, when it traded at R18,42.
President’s conflict of interest
An independent panel determined that Ramaphosa “has a case to answer” in terms of an impeachment inquiry and that “there was a deliberate intention not to investigate the commission of the crimes committed at Phala Phala openly”.
The report states that the inquiry found “that this information discloses, prima facie, that the president may have committed a serious violation of Section 96(2)(a) [of the Constitution]; a serious violation of… [the Prevention and Combating of Corrupt Activities Act]; a serious misconduct in that the president violated Section 96(2)(b) by acting in a way that is inconsistent with his office; and a serious misconduct in that the president violated Section 96(2)(b) by exposing himself to a situation involving a conflict between his official responsibilities and his private business.
Section 96(2) deals with paid work undertaken by members of Cabinet, as well as conflict of interest and improper benefit.