Rand gains on Kganyago reappointment

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Rand gains on Kganyago reappointment

Published Date: 2019-07-11 | Source: Stephen Gunnion | Author: Stephen Gunnion

Rand gains on Kganyago reappointment

Dovish comments made by US Fed chair Jerome Powell added to the rand's strength.

The rand rallied yesterday afternoon after Reserve Bank governor Lesetja Kganyago was re-appointed as governor of the SA Reserve Bank for another five years when his current term expires on 8 November. President Cyril Ramaphosa made the appointment after consulting with Minister of Finance Tito Mboweni and the SARB's board of directors.

The president also appointed Fundi Tshazibana and Rashad Cassim as deputy governors of the bank, filling spaces vacated by the resignation of Francois Groepe in January and, more recently, the retirement of Daniel Mminele at the end of June. Tshazibana is currently an advisor to Kganyago, while Cassim is head of economic research and statistics.

The currency strengthened by over a percent against the dollar and was trading at R14.01 yesterday evening. It was also firmer against the euro at R15.76 and the pound at R17.50.

The move is likely to comfort investors as it will provide policy continuity during a tough period for the economy. Kganyago has been outspoken about the bank's independent in the face of calls for its nationalisation and changes to its mandate.

TreasuryONE said the rand was also supported by comments from Jerome Powell, the chair of the US Federal Reserve, who said the US economy was not firing on all cylinders, raising expectations of rate cuts in the world's biggest economy. The treasury services company said if rand broke below R14 to the dollar it would present a buying opportunity for importers.





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