South African rand increases more 1% amid ANC’s preparation to push out Zuma

South Africa’s rand jumped more than 1 percent to its firmest since June 2015 and bonds hit a one-week best on Wednesday after the ruling African National Congress (ANC) said it would proceed with a vote to remove President Jacob Zuma from office.

At 1140 GMT, according to Reuters’ report, the rand was 1.1 percent firmer at 11.8200 per dollar. It earlier rallied to a session best 11.7975 just after the ANC’s parliamentary caucus said it would support a motion of no-confidence brought by an opposition party against Zuma and due to be heard in the house on Thursday.

The party’s chief whip Jackson Mthembu said the ANC hoped to elect party leader Cyril Ramaphosa as president of the country on Thursday, after the no-confidence vote, or on Friday, accelerating the end of Zuma’s scandal-plagued reign.

“We saw the rand strengthen about 10 cents on the announcement but the fear is it’s still not a done deal, so that’s why we’ve seen the rand bounce. Zuma could still have something up his sleeve,” Tradition Futures derivatives trader Gillian van Heerden said.

The rand’s fortunes have been closely tied to political outcomes over the past couple of years, with the impasse in the last few weeks over Zuma’s future weighing on the currency’s 2018 rally.

The cost of insurance on the rand also rose sharply, with the price of one-week options increasing nearly 30 percent.

Bonds also firmed, with the yield on the benchmark 2026 paper down 6 basis points at 8.395 percent.

Stocks gained, with the Johannesburg bourse’s index of 40 blue-chip shares up 0.5 percent at 50,658 points, while the All-Share index rose 0.5 percent to 57,501 points.