The South African rand lost more than 3% on Wednesday due to reservations about the land reform plan as well as a Moody’s warning about the fiscal deficit.
According to TreasuryONE, “The rand is under massive pressure on renewed speculation regarding land reform and the implementations thereof. In an already risk-averse market, this only adds to the negative sentiment.”
Tuesday the Rand also took a steep fall. This was within minutes of an announcement from Parliament that they had passed a motion which will begin the process of land expropriation without compensation.
Upon President Cyril Ramaphosa’s inauguration in February 2018, he confirmed the ANC has decided to seize land without compensation in order to expedite land reform. He also reassured South Africa that he would do it in a responsible manner. One that wouldn’t leave the economy in shambles, or disrupt security, agriculture, and food production.
The Democratic Alliance objected to this, stating concern that this would scare off potential investors in South Africa as “property rights would be undermined.”
Wedneday at 3pm, the Rand is valued at 14.61 ZAR to 1 USD. This is a major drop in value from February when the Rand was valued as high as 11.55 ZAR to 1 USD. This is almost a 20 percent decline in value.Contests by Rewards Fuel