Domestically, weaker growth prospects and perceptions around political events such as the cabinet reshuffle resulted in volatility in the local financial markets increasing sharply just before year-end. Markets initially reacted extremely negatively to the developments, with local assets experiencing severe selling pressure.
The exchange rate of the rand touched what was then a historic low of R16.05 against the US dollar, the benchmark R186 government bond yield reached its highest level in seven years of 10.62 per cent on 11 December, while the country’s 5-year CDS spreads also widened substantially by 72 basis points relative to emerging market peers.