In a barrage of headlines that sparked chaos in FX algo markets, The South African government proclaimed proudly that it is opposed to illegal land grabs (sparking a rally in the rand) before humans realized that this is mere statement of fact and that the entire reason for this process is to 'legalize' land grabs through reform.

As Deputy President David Mabuza said, the nation will “slide into catastrophe” if land reform doesn’t take place.

“The majority of our people are poor and homeless,” he told lawmakers in Cape Town Thursday. “Our resources to carry out reform are limited.”

And the reaction is now getting real as the Rand nears two-week lows once again...

Notably, the rand is behaving more erratically this month than it did during the height of the power struggle between Jacob Zuma and Cyril Ramaphosa in December. The rand’s one-month historical volatility is now at its highest level since December 2016 and the currency is headed for its worst August performance against the dollar on record, on track for a 9 percent drop.

As Bloomberg notes, President Cyril Ramaphosa has embraced land expropriation without compensation as a means to achieve equality and racial justice, and in a bid to steal a march on populist opponents before elections in 2019. A planned amendment to the constitution is still a work in progress, with public hearings on the matter concluding next month.

Yesterday saw UK PM Theresa May confirm her support of Ramaphosa's "land reforms" as long as they're legal...

"The UK has for some time now supported land reform that is legal and transparent and generated through a democratic process. I discussed it with President Ramaphosa during his visit to Britain earlier this year and will discuss it with him again later today," she said. "I welcome the comments that President Ramaphosa has already made, bearing in mind the economic and social aspects of it. I think he's made some comments that it won't be a smash and grab approach. I think there's an opportunity to unlock investment."

And today, The IMF also backed "land reforms" as long as they are "rules based."

The IMF's senior resident representative in South Africa Montfort Mlachila told Reuters that the reform must not damage farm output to ensure South Africans continue to have reliable food supplies. President Cyril Ramaphosa has said the ruling African National Congress (ANC) plans to change the constitution to allow the expropriation of land without compensation, as most of it is still owned by members of the white minority. “We are in full support of the need to undertake land reforms in order to address the issues of inequality,” Mlachila said in an interview. “There is need to have a transparent, rules-based, and constitutional process that leads to desirable outcomes. It is particularly important not to undermine agricultural production and food security.”

The question is - who sets the rules, because it is certainly not the market.