South Africa’s rand weakened on Thursday on speculation that President Jacob Zuma was preparing to announce a controversial plan for free tertiary education.
At 1419 GMT, the rand was down 0.78 percent against the dollar at 14.2650, after earlier trading more than 1 percent weaker on the day.
Zuma said on Thursday in parliament that he would make an announcement on higher education soon. The Times newspaper, citing sources, reported this week that Zuma was planning to introduce free education across the board.
Jan Sluis-Cremer, a currency trader at RMB Bank, said the market had taken Zuma’s comments as confirmation that free education would be introduced.
“That’s credit negative. Unless Zuma has a tree with 200 rand notes somewhere we can’t afford it,” Sluis-Cremer said.