August 17, 2018 / 6:59 AM / 2 months ago

Rand steadies after jitters on central bank nationalisation bill

JOHANNESBURG, Aug 17 (Reuters) - South Africa’s rand steadied in early trade on Friday after being rattled overnight by news that the opposition Economic Freedom Fighters (EFF) has introduced a bill to nationalise the central bank.

At 0638 GMT, the rand traded at 14.7100 per dollar, not far off its overnight close of 14.7275.

Parliament said late on Thursday that EFF leader Julius Malema had introduced the South African Reserve Bank Amendment Bill to “make the state the sole holder of the shares in the bank”.

“With the independence of the central bank once again potentially in question, this combined with all of the other investor unfriendly headlines locally, (is) likely to keep the local unit on the back foot despite an improvement in the global outlook for emerging markets,” Nedbank analysts wrote in a note.

The ruling African National Congress also tabled a motion calling for full public ownership of the central bank in March but then withdrew it saying it wanted to do more consultations first.

The central bank has said any change of ownership would not affect its mandate or independence.

The rand is down nearly 5 percent this week, also hit by concerns over South Africa’s economic outlook and investors’ move to dump assets seen as risky in the wake of the Turkish lira’s plunge.

In fixed income, the yield on the benchmark bond due in 2026 was up 6 basis points at 9.055 percent, as prices fell. (Reporting by Olivia Kumwenda-Mtambo Editing by Susan Fenton)

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