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The rand strengthened early this morning, extending gains to a fourth consecutive session in thin trade after a holiday in the United States and ahead of local GDP data that is expected to show the economy avoided recession.
Statistician-General Pali Lehohla is releasing the gross domestic product estimates for the second quarter of 2016 this morning.
This morning the rand was 0.6% firmer at 14.2950 per dollar at 8.50am versus an overnight close of 14.3800.
Government bonds were also firmer. The yield on the benchmark 2026 paper was down four basis points to 8.81%.
The second-quarter GDP results are expected to be released at 11.30am. Positive numbers would lift sentiment following the 1.2% contraction in the first quarter.
Political unease was still lingering with the police’s position still unclear on the possible arrest of Finance Minster Pravin Gordhan.
On Sunday, City Press reported that the target was Gordhan’s power, and there were efforts under way to strip his treasury department of a number of its powers, including oversight on procurement systems.
The powerful Financial Intelligence Centre Act, which affords the finance minister much power, could also see its reporting lines changed.
The treasury has been under pressure from leaders in the governing ANC who claim the institution has been “captured” by big business.
Beyond the criminal investigation against Gordhan, officials in the ANC and treasury say the plan to weaken the body could see some of its functions – such as oversight on the country’s procurement system as well as the capacity to monitor financial crimes – being shifted away from it.
