THE SA rand recovered on Monday following the appointment of Pravin Gordhan, the current Minister of Cooperative Governance and Traditional Affairs, as the new finance minister.
The rand recovered to 15.09 rand from 15.89 rand against the US dollar immediately after the news broke late Sunday night. This was the currency’s biggest one-day advance since October 2008.
The local currency briefly breached R16 in nervous trade on Friday in response to the unexpected axing of Finance Minister Nhlanhla Nene on December 9.
Gordhan was the second finance minister appointed by Zuma in four days.
On December 9, Zuma appointed David van Rooyen as finance minister to replace Nene.
The appointment of Van Rooyen, a largely unknown MP, has caused jitters at the market, sending the South African rand plummeting to record lows of 16 to the US dollar and the fallout of the SA financial market.
Explaining his decision to appoint Gordhan as finance minister, Zuma said he had received many representations to reconsider Van Rooyen’s appointment.
“As a democratic government, we emphasize the importance of listening to the people and to respond to their views,” Zuma said.
The decision was taken after serious consideration and reflection, he said.
Gordhan, who had served as finance minister in the previous government, will return to a portfolio that he had held proficiently during the fourth administration, Zuma said.
Zuma said he has also decided to appoint Van Rooyen as the new Minister of Cooperative Governance and Traditional Affairs (COGTA). ANA
Meanwhile Reuters reports that Gordhan said on Monday Africa’s biggest economy would stay the course on sound fiscal management.
“We will stay the course of sound fiscal management. Our expenditure ceiling is sacrosanct,” said Gordhan, who returns for a second stint at the Treasury after a dramatic U-turn by President Jacob Zuma.