Rand falls further on free education reports

10th November 2017 By: Reuters

Rand falls further on free education reports

Photo by: Bloomberg

South Africa's rand currency extended losses on Friday, reacting to news reports that President Jacob Zuma is preparing to introduce free tertiary education, which would put added pressure on public finances.

At 1150 GMT the rand was 0.9 percent weaker against the dollar at 14.3750, after earlier being down more than 1 percent.

Philip Pearce, a currency dealer at TreasuryOne, said traders were betting that the rumours about higher education spending - as reported in South African newspapers this week - were true.

"If free education goes through, the market thinks ratings agencies will definitely downgrade South Africa," he said. "Plus there are a lot of events stacked up till year-end - investors don't want to be exposed to that".