Rand drops on Zuma's surprise 'pro-nuclear' Cabinet reshuffle

Cape Town - The rand lost more than 0.5% within minutes of President Jacob Zuma's announcement of yet another surprise Cabinet reshuffle.

The biggest move is that of energy - Mmamoloko Kubayi has been moved from the energy portfolio to communications, with David Mahlobo now occupying the position of Minister of Energy.

Other changes include Hlengiwe Mkhize moved to Minister of Higher Education and Training while Ayanda Dlodlo is the new Minister of Home Affairs, Bongani Thomas Bongo is the Minister of State Security and Buti Manamela is the Deputy Minister of Higher Education and Training.

Desperate attempt to force through nuclear deal?

Currency dealers at TreasuryOne questioned the energy portfolio reshuffle, citing "a possible new nuclear deal trying to be pushed through".

"This is all about the nuclear deal. David Mahlobo has accompanied the president on visits to Russia, presumably to lay the ground for the Rosatom nuclear deal," said Lawson Naidoo of the Council for the Advancement of the South African Constitution.

Safcei spokesperson Liz McDaid said: "Since our court victory, there has been nothing happening regarding the outcome for the nuclear programme. We suspected something was happening behind closed doors. Last Friday's nuclear site authorisation and now today's Cabinet reshuffle has seen the intelligence minister become the energy minister. This is a desperate attempt to force through the nuclear deal."

By 10:59 the local unit was trading at R13.37 to the US dollar, from an overnight close of R13.31 and intra-day low of R13.29/$. The unit immediately spiked to R13.39 against the greenback on the reshuffle news.

Political analyst Daniel Silke told Fin24 in an emailed response for comment that there are two aspects to the latest Cabinet reshuffle. "Firstly, Mahlobo is seen as close to Zuma and someone who can drive the nuclear deal, so I agree that it is relevant. The second part is the axing of Blade Ndzimande and the demise of SACP representation at a senior level in the Cabinet.

"While the nuclear deal might play a role on the one hand, Zuma is clearing out his political enemies with Ndzimande's departure as well. The reshuffle is likely to stoke the strains in the Alliance although it is an indicator that Zuma now barely cares about the role of the SACP," he said.

Jameel Ahmad, VP of Corporate Development and Market Research, FXTM said the  rand has shown some weakness following the news of Zuma's Cabinet reshuffled, but the volatility hasn't been that severe.

"However, the weakness in the rand following the announcement does show that the currency is still sensitive to political risk. Perhaps the markets have become desensitised to this kind of political maneuvering as it is the second time this year, and the 11th time that the Cabinet has been reshuffled during his presidency,” said Ahmad.

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

Read Fin24's top stories trending on Twitter:


We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
18.09
-0.8%
Rand - Pound
20.21
-0.0%
Rand - Euro
17.74
-0.0%
Rand - Aus dollar
11.59
-0.0%
Rand - Yen
0.13
-0.0%
Gold
1,660.90
0.0%
Silver
19.03
0.0%
Palladium
2,166.50
0.0%
Platinum
864.50
0.0%
Brent Crude
85.14
-2.4%
Top 40
57,390
+0.8%
All Share
63,726
+0.7%
Resource 10
60,230
+0.7%
Industrial 25
77,400
+0.8%
Financial 15
13,796
+0.7%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders