The Pound has risen marginally against the Rand on Friday, but could be unsettled by upcoming EU announcements on UK citizens.
Pound Predicted to Rise if EU Leaders Offer Similar Deal for UK Citizens
Sterling has appreciated recently on Brexit news, following Theresa May’s presentation of an offer for EU citizens in the UK.
This initial proposal has had a mixed reception among EU leaders; it would grant EU citizens similar rights to UK citizens if they enter the UK before Brexit, after residing in the UK for 5 years.
If, after digesting the fine detail of this news, EU leaders allow UK citizens a similar deal, then the Pound could advance further against the Rand.
Conversely, a rejection of such terms or a less-than-equal reciprocal deal may trigger sharp Pound losses.
Rand Rally Possible if Mbete Permits Secret Ballot
The Rand may be in for a sharp rise against the Pound in the near-term, depending on the choice made by National Assembly Speaker Baleka Mbete.
As part of the latest efforts to remove controversial President Jacob Zuma from power, a secret ballot has been called for a confidence vote.
This differs from previous ‘public’ votes, which have always seen Zuma dodge a politically perilous vote of no confidence.
The crux of the matter is that Mbete now holds the power to grant or deny the request for a secret vote. Problematically, Mbete is a member of the African National Congress (ANC), the ruling party with Jacob Zuma at its head.
If she approves the vote and Zuma is removed then the Rand could rally, but Mbete may find herself out of a job due to party hostility.
Conversely, denying the vote may shore up Mbete’s position within the ANC, but may also bring a failed vote, which would leave Zuma in charge.
The President is considered an economically unstable figure, as he has previously faced countless corruption charges and has triggered Rand crashes by making snap cabinet decisions.
If a secret vote is approved and Zuma is forced out, then the Rand could soar to historic highs. Zuma has been in office since 2009, so hopes for a fresh direction for the country could prove overwhelming in the ZAR GBP exchange rate.
Recent Interbank GBP ZAR Exchange Rates
At the time of writing, the Pound to Rand (GBP ZAR) exchange rate was trading at 16.4763 and the Rand to Pound (ZAR GBP) exchange rate was trading at 0.0607.
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