Rand stopped in its tracks by Mboweni’s resignation

The rand was stopped in its tracks by former finance minister, Tito Mboweni’s resignation. The South African currency fell from R14,38 to R14,75 against the US dollar just after the announcement that Enoch Godongwana will replace him.

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According to the Bureau of Economic Research at Stellenbosch University, the rand exchange rate had managed to strengthen by almost 2% against the euro and the dollar by closing time, before the Cabinet reshuffle was announced.

Despite giving up some of the gains in the wake of Mboweni’s exit, at levels of around R14.50/$, the rand was still trading 0.9% firmer than last week’s levels in Asian trade on Friday morning. It ended the day on R14,60?$.

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Economist Mike Schüssler says it too early to say what the impact of Godongwana’s appointment will have on the markets.

“The markets do not know him yet and therefore we have to wait and see what happens.”