Markets welcome new sarb governor

Oct 06 2014 12:52

Pretoria - The rand has rallied to a session high after the appointment of Lesetja Kganyago, who is well-regarded by markets and economists as a staunch guardian of the independence of the SA Reserve Bank.

President Jacob Zuma appointed Kganyago on Monday, as expected by financial markets, replacing the respected Gill Marcus whose five-year term ends on November 8.

The rand rallied to a session high of R11.2590 on the appointment.

"We view the decision as a positive for South African monetary policy going forward, with Kganyago likely to continue to pursue the bank's mandate of price stability while at the same time remaining sensitive to the challenges the economy continues to face," said Jeffrey Schultz, an economist at BNP Paribas Cadiz Securities.

Kganyago, who will take over as head of the bank on November 9, said its primary objective was to protect the value of the rand in the interest of balanced and sustainable growth, as well as ensuring the stability of prices and the financial system.

"I have no doubt that eyes will be on me," he said, vowing to pursue the bank's mandate "without fear, favour or prejudice".

"I shall not disappoint," he told a news conference.

Analysts surveyed by Reuters had predicted the 48-year-old deputy governor, who has also served as director general at the finance ministry, would get the post ahead of fellow deputy governor Daniel Mminele.

Kganyago had more political capital than Mminele and would probably gain the ear of the Treasury and other government departments more easily as a result, the analysts said.

Kganyago will chair the bank's last policy meeting of the year on November 18-20.

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