South African rand seesaws after ruling party withdraws expropriation bill

Siphiwe
Sibeko/Reuters

The South
African rand seesawed Tuesday after the country’s ruling
party withdrew a land-reform policy passed by parliament in
2016 amid a constitutional review.

The rand
erased gains of as much as 1% — to below 14 per US dollar — after
the parliament’s portfolio committee on public works ruled to
withdraw the bill enabling plans to expropriate land without
compensation. The party said it was withdrawn in efforts
to allow “an ongoing process that could lead to the changing
of the constitution to pave way for expropriation of land without
compensation,” Reuters
reports.

The currency had come under pressure after Trump commented on the
policy in a tweet. 

“I have asked Secretary of State @SecPompeo to closely study the
South Africa land and farm seizures and expropriations and the
large scale killing of farmers,” Trump
tweeted. “‘South African Government is now seizing land from
white farmers.'”

He tagged Fox News host Tucker Carlson, who had just taken aim at
the State Department for not weighing in on the proposed land
reforms. 

Jameel Ahmad, global head of currency strategy at FXTM,
said the tweet added further selling
pressure “on concerns that South Africa could be next in line to
face the wrath of President Trump.”

“The United States President recently tweeted around one of the
most sensitive issues in post-apartheid history, land reform,”
Ahmad said.

“The tweet from Trump initially prompted fears that South Africa
could unexpectedly find itself as the next nation to be under the
public eye due to President Trump’s focus of attention.”

Markets Insider