Appointment of new FM boosts South African market

Pretoria, Dec 14 (IANS) Financial index at the Johannesburg Stock Exchange (JSE) gained 8.58 percent at the opening on Monday following the appointment of Pravin Gordhan as South Africa’s new finance minister.

President Jacob Zuma on Sunday night appointed Gordhan, current minister of cooperative governance and traditional affairs, as finance minister to replace David van Rooyen, who was appointed only four days ago, Xinhua news agency reported.

Gordhan was the second finance minister appointed by Zuma in four days. Gordhan’s appointment gave a boost to the market. The South African rand recovered to 15.09 rand from 15.89 rand immediately after the news broke late Sunday.

This was the currency’s biggest one-day advance since October 2008.

The rand had fallen about eight percent to major currencies since Zuma fired Nhlanhla Nene on December 9 and replaced him with Van Rooyen, a largely unknown MP.

The local currency briefly breached 16 rand against the dollar in nervous trade on Friday in response to the unexpected axing of Nene and the appointment of van Rooyen.

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 emphasie 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 was finance minister from 2009 to 2014, is well known for his fiscal discipline and has rich experience of handling finance issues.

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