Rand weakens as Trump tweets about land debate

The rand slumped against the dollar after a tweet by US President Donald Trump on the country’s land debate fueled speculation of possible sanctions against the country.

The currency weakened as much as 1.7% after Trump said he asked US Secretary of State Mike Pompeo “to closely study the South Africa land and farm seizures and expropriations”. The South African government hit back, tweeting that it “totally rejects this narrow perception which only seeks to divide our nation.”

The US’s acting ambassador to the country will be summoned to explain Trump’s comments, two people familiar with the situation said Thursday. He was intervening in an ongoing debate about whether South Africa should implement a policy of seizing land without paying for it in a bid to address inequalities built up during apartheid.

The comment raised concern that the US could target South Africa with economic sanctions having already moved against Turkey, a decision that would weaken the rand further, according to Hironori Sannami, an emerging-market currency trader at Mizuho Bank.

The rand was 1.3% weaker at 14.3466 per dollar by 08:23 in Johannesburg. Yields on benchmark 2026 government bonds rose 4 basis points to 8.97%.

On Wednesday, South African President Cyril Ramaphosa told Parliament that increasing access to land for the poor would happen in an orderly fashion and would initially focus on making state property available. The rand strengthened on his comments.

“One tweet does not make a book,” said Warrick Butler, a currency trader at Standard Bank Group  “There are far too many other components affecting the rand. If the dollar reverses its recent correction then so too will the rand regardless of Twitter.”

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

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
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
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