South African rand unchanged after Zuma avoids return to jail

JOHANNESBURG (Reuters) -The South African rand was flat on Friday, after former president Jacob Zuma avoided being returned to jail thanks to a reduction in his sentence approved by the current president, a move that eliminated a scenario that could have hit businesses.

There were fears there could be violent protests if Zuma had been ordered to serve more time in prison following a court ruling that his release on medical parole in September 2021 was unlawful.

After Zuma was taken into custody for contempt of court in July 2021 more than 300 people were killed in riots.

The remission approved by President Cyril Ramaphosa appears to have made moot a decision by the country’s top prisons official on whether Zuma should go back to jail.

At 1502 GMT, the rand traded at 18.8775 against the dollar, same as its previous close.

The rand has been volatile in recent weeks, hitting an all-time low on June 1 before recovering strongly by the end of July. But since the start of August it is down more than 5% against the dollar.

Rand Merchant Bank said in a morning briefing that although there were signs of rand stability it was “way too early … to be convinced of a return to normality”.

On the Johannesburg Stock Exchange, the Top-40 index closed down about 1.1%. South Africa’s benchmark 2030 government bond was weaker, the yield up 4.5 basis points to 10.165%.

(Reporting by Tannur Anders with additional reporting by Bhargav AcharyaEditing by Alexander Winning, Mark Potter, William Maclean)