The rand led gains among its major peers after South African President Cyril Ramaphosa said the currency has weakened too steeply against the dollar and vowed that his plans to carry out land reform won’t cause mayhem.
“The rand is undervalued at the moment,” Ramaphosa said Wednesday in an interview with Bloomberg Television in New York, where he’s been attending the United Nations General Assembly. “We want the rand to be well-balanced as to be able to support the economic trajectory of country.”
The rand is back in vogue as sentiment improves locally and globally, Nedbank analysts Mehul Daya and Walter de Wet wrote in a note to clients. For Societe Generale SA, the rand’s rally in the past three weeks is just a temporary blip, with more weakness in store as poor fundamentals and an unfavorable external backdrop weigh on the currency. Others, including Standard Chartered Plc, see the currency as undervalued and due for further gains, though perhaps not quite yet.
The rand climbed 1.2% to 14.1911 per dollar at 12:38 pm in New York, the most among the 31 most-traded currencies tracked by Bloomberg.
In addition to the comments on the currency, Ramaphosa also said his administration will pursue plans to redistribute land to the country’s black majority and is still considering whether constitutional amendments are necessary to make it easier to expropriate property without compensation.