* Rand recovers some losses in volatile trade
* Forward markets show no chance of interest rate cut
* Central bank's policy announcement at 1300 GMT
(Adds latest prices, analyst comments ahead of rates decision)
JOHANNESBURG, March 30 South Africa's rand and
bonds recouped losses on Thursday in volatile trade over jitters
of the finance minister's sacking, while markets slashed bets of
an interest rate cut on the rising political uncertainty in
Africa's most industrialised economy.
At 1130 GMT the rand had gained 1.02 percent to
12.8900 per dollar. The currency had weakened more than 5
percent since Monday after President Jacob Zuma ordered Finance
Minister Pravin Gordhan to abandon an investor roadshow in
Britain and return home "immediately".
The rand rose to a session high of 12.82 after Reuters
exclusively reported that Zuma is considering offering to step
down next year, at least 12 months before his term as South
African president ends.
Bonds reached their firmest since Monday, with the yield on
benchmark paper due in 2026 falling 12 basis points to
Currency broker at Capilis Asset Management Giacomo Bonavera
said the rand would react more sharply to bad news than good
news, and that big moves would also be determined by technical
"Traders are using technical levels to gauge where the
market will go, and 13.75 looks like a level they might target,
which is about 10 percent weaker than where the rand was when
the news (of Gordhan's recall) hit," Bonavera said.
Bonavera said 10 percent was roughly the same size move that
preceded a rand recovery following Zuma's unexplained decision
to fire then finance minister Nhlanhla Nene in December 2015.
Interest rate markets also reacted to the political
upheaval, with forward rate markets now pricing in a less than
zero percent chance of a 25 basis point cut to lending rates at
the South African Reserve Bank's policy announcement at 1300
"The short end of the market is pricing in a smaller chance
of a cut as opposed to where it was last week, and that's
because of all the political uncertainty," said fixed income
specialist at Rand Merchant Bank Michelle Wohlberg.
Inflation slowed to 6.3 percent in February from 6.6 percent
the previous month, while the current account deficit narrowed
to near a six-year low, giving policymakers room to consider a
rate cut to buoy the ailing economy.
(Reporting by Mfuneko Toyana; Editing by James Macharia)