By Bhargav Acharya
JOHANNESBURG (Reuters) -The South African rand strengthened on Tuesday, helped by President Cyril Ramaphosa winning the governing African National Congress (ANC) party’s backing over the “Farmgate” scandal and better-than-forecast economic growth figures.
Ramaphosa gained a lifeline after the ANC said on Monday it would request its lawmakers to reject a report that said he may have violated the constitution over a large amount of foreign currency stolen from his private game farm.
The report by a panel appointed by the speaker of parliament was due to be debated on Tuesday, but that was delayed to Dec. 13. Ramaphosa has denied wrongdoing over the Phala Phala farm robbery and has challenged the panel’s report in court.
Investors fear uncertainty and that any other president could slow down or reverse economic reforms, increase government spending and take on more debt at levels they deem unsustainable.
At 1545 GMT, the rand traded at 17.3600 against the dollar, up about 0.6% on its previous close.
“The rand is performing better as there is more clarity around how the whole Phala Phala mess will be handled,” said Wichard Cilliers, head of market risk management at TreasuryONE.
“When there was uncertainty around resigning and how the whole situation will be handled, the rand was under pressure.”
Investec economist Annabel Bishop said strong GDP figures also buoyed the rand. Third-quarter output grew 1.6% quarter on quarter, better than predictions for a 0.6% expansion.
The Johannesburg Stock Exchange’s All-share index closed 0.2% weaker, mirroring falls in global shares.
(Additional reporting by Alexander WinningEditing by James Macharia Chege and Raissa Kasolowsky)
