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Rand steady as Nene, Gordhan return to Cabinet

Feb 26 2018 22:49

Cape Town - The rand held steady at R11.54 to the US dollar on Monday evening after President Cyril Ramaphosa announced his first changes to the national executive, as he had promised to do in his State of the Nation Address earlier this month.

Malusi Gigaba has been shifted back to the home affairs portfolio from finance, to make way for respected former Finance Minister Nhlanhla Nene. 

Nene who was axed from his finance ministry job in then President Jacob Zuma's Cabinet in December 2015 in a shock move that caused the rand to plunge.

Another former finance minister, Pravin Gordhan, has also been reappointed to the Cabinet. He will be taking over from Lynne Brown as minister of public enterprises. 

"The Cabinet will stay the same size for now. There is very little reaction on the currency side with USDZAR still trading around R11.54, where it opened this morning,"said TreasuryONE in a snapnote after Ramaphosa made the announcement at around 22:00.

The rand has strengthened more than R2 to the US dollar since the election of Cyril Ramaphosa as ANC president on 18 December last year.

Signs of action against corruption and a clampdown on state capture, coupled with positive moves in the political arena, have taken the rand from R13.50 to the greenback just before Ramaphosa's December election, to R11.54 currently.

Since Ramaphosa was elected ANC president, Jacob Zuma resigned as leader of the country (on Valentine's day), reluctantly heeding orders by party bigwigs to quit or face a motion of no confidence in Parliament. 

The day after Zuma quit Ramaphosa was sworn in as South Africa's fifth President of the democratic era. He delivered his maiden State of the Nation Address on 16 February to a standing ovation in a full Assembly.

Analysts on Monday evening said that not all the names in Ramaphosa's Cabinet would be welcomed by markets, however. 

"One has to certainly note that the Cabinet still contains some names that one would have expected the new president to get rid off. Seems that there was some comprises made. For now the market seems very muted," said TreasuryONE dealer Wichard Cilliers.

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cyril  |  ramaphosa  |  rand  |  markets  |  cabinet reshuffle  |  currencies


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