S. African rand tumbles to record lows

The South African rand continued to weaken on Friday, plummeting to a record low of 16 against 1 U.S. dollar.

The local currency has continued to slide dramatically against major currencies since President Jacob Zuma announced his decision on Wednesday to replace Finance Minister Nhlanhla Nene with David van Rooyen, a largely unknown MP.

In just two days, the rand has been down by around eight percent, dropping to around R24.02 to the pound and R17.38 to the euro.

The rand is under further depreciation pressure amid a looming hike in interest rate by the U.S. Federal Reserve.

The move has also seen banking shares drop by more than 10 percent to levels last seen after the 2008 global financial crash.

Stocks snapped a three-day losing streak on Thursday, as market expected that the U.S. Federal Reserve will announce a rate hike in its next policy meeting.

"The removal of Nene has shaken the markets, and the rand might continue to fluctuate for about a week," said Garikai Matambo, a research analyst at Frontier Advisory.

"The country is currently facing economic difficulties and would not want such things which unsettle the markets," Matambo said.

In a related development on Friday, Minister in the Presidency Jeff Radebe defended Zuma's move to fire Nene, saying the appointment and removal of ministers from office is the prerogative of the president.

Zuma did not give reasons for sacking Nene. But it's speculated that Nene was fired because of his fiscal prudence and political reasons.

This includes his reluctance to fund the one-trillion-rand nuclear programme, his inquiry into the squandering of funds at the South African Broadcasting Corporation and his ruling against South African Airways in negotiations with Airbus. Enditem