South Africa’s rand strengthened on Friday, supported by a weaker US dollar, even as investors weighed a constitutional court ruling reviving impeachment proceedings against President Cyril Ramaphosa in the long-running “Farmgate” scandal.
By 1323 GMT, the currency traded at 16.38 against the dollar, up 0.8% from its previous close, as global currency markets reacted to broader dollar softness linked to shifting geopolitical expectations.
The greenback weakened against a basket of major currencies as investors responded to growing optimism over a possible diplomatic breakthrough between the United States and Iran, which has helped ease some risk sentiment in global markets.
Domestically, South African assets were also influenced by Friday’s ruling from the country’s top court, which ordered parliament to revive impeachment proceedings against Ramaphosa, finding that lawmakers had acted unlawfully when they previously blocked the process.
The case stems from allegations surrounding the 2020 theft of foreign currency from Ramaphosa’s Phala Phala game farm, a scandal that has shadowed his presidency since it first emerged in 2022.
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Ramaphosa has denied wrongdoing, saying the cash was proceeds from the sale of buffaloes and that he complied with legal requirements.
The court ruling does not automatically trigger impeachment, but it requires parliament to establish a formal committee to investigate the allegations. Any eventual removal of a president would require a two-thirds majority in the National Assembly.
Market analysts said the ruling added a layer of political uncertainty but noted that investors were more focused on global dollar movements and South Africa’s broader macroeconomic indicators.
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South Africa’s foreign exchange reserves also provided some support to sentiment. Data from the central bank showed net foreign reserves rose to $73.76 billion at the end of April, up from $73.19 billion in March, reflecting relatively stable external buffers.
However, local equity and bond markets weakened. The Johannesburg Stock Exchange’s Top-40 index fell 1.4%, while government bonds also came under pressure, with the benchmark 2035 bond yield rising five basis points to 8.625%.
Investors are now turning their attention to a series of key domestic data releases expected next week, including unemployment figures, manufacturing output and mining production, which are likely to provide a clearer picture of economic momentum in Africa’s most industrialised economy.
Analysts say those indicators will be closely watched for signs of whether high interest rates, weak domestic demand and structural constraints continue to weigh on growth.
Despite Friday’s political developments, currency traders said the rand’s performance remained largely tied to global risk appetite and US dollar dynamics, which continue to dominate emerging market currency movements.
In the near term, market participants are expected to balance domestic political risk linked to the court ruling with broader international factors, including geopolitical tensions and shifting expectations around global interest rates.
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For now, the rand’s modest gains suggest that investors are treating the court decision as a legal and political development rather than an immediate economic shock, though sentiment could shift depending on how impeachment proceedings unfold in parliament.
