The rand weakened early on Thursday, edging towards the record low hit in the previous session after President Jacob Zuma removed Finance Minister Nhlanhla Nene.

By 08:01 the rand had weakened 0.61% to R15.0665/$ compared to its close of 14.9750 in New York.

Nene’s dismissal sent the rand to a record low of 15.3000 as sentiment soured in an economy that is barely growing, squeezed by low commodity prices globally and the near certainty of an interest rate rise in the United States next week.

“The timing of this decision and what it entails is very negative for the Rand and credibility of the finance ministry and sound financial institution framework,” said Standard Bank trader Oliver Alwar.

“Investor sentiment will struggle given its timing so soon after ratings agencies met last Friday.”

Fitch downgraded the economy to just one notch above sub-investment grade last Friday.

Government bonds however held on to their gains, with the yield on the benchmark paper due in 2026 shedding 0.05 basis points to 8.830%, a level last seen in February 2014.

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