South Africa: New finance min. reassures investors

However, the index regained R118 billion on Monday following a second cabinet reshuffle which saw Pravin Gordhan, Nene’s former boss, reinstated in his old position.

Van Rooyen was appointed to replace Nhlanhla Nene, but by then the markets were in turmoil, with the rand falling to record lows against major currencies.

South Africa’s currency recovered at the news that an experienced finance minister has been reinstated, after the president abruptly replaced two finance ministers in less than a week.

Subsequent to the consultation, Nene’s predecessor Pravin Gordhan was on Sunday night appointed back to the finance portfolio while Van Rooyen took over Gordhan’s cooperative governance and traditional affairs ministry.

Gordhan’s reappointment as finance minister is a demonstration of a responsive and accountable government, the ANC said Monday. The yield was 7,6 percent before Nene’s dismissal.

The party said in a statement that David van Rooyen was inexperienced with questionable political credentials.

Bank executives, including Barclays Africa Group Ltd. Chief Executive Officer Maria Ramos, Investec Plc CEO Stephen Koseff and Goldman Sachs Group Inc. local head Colin Coleman, met with senior ANC officials Jeff Radebe and Zweli Mkhize to express their concern at Van Rooyen’s appointment, Radebe told reporters.

The tumult since last week triggered a collapse in the rand as investors pulled out of the country, which is beset by high unemployment, slow growth and accusations of worsening government corruption.

Gordhan held the post previously from May 2009 to 2014. “I represent the new scenario”, he said.

The immediate reaction of South Africa’s Rand following the announcement is a fine example.

But the president said in a statement late on Sunday that his response was a democratic move that emphasized the importance of listening to the people and to respond to their views. The next day the rand slumped even further to 16 rand to $1. Briefing journalists on Monday, he confidently displayed the economic nous that until last week made South Africa’s financial institutions respected both at home and overseas.

Last week, Fitch ratings agency cut its assessment of South African debt to one notch above junk status.

Althgough Gordhan’s appointment raised hopes on the markets, bigger problems remain to be addressed by the government, Mbongolwane said.

Prof. Duvenhage believes Nene’s removal might be because of his strict policies on spending such as his refusal to bail out the national carrier South African Airways whose board chair has a close relationship with the president.

Zuma’s decision drew much criticism from opposition parties, the finance sector and citizens on social media.

The local currency had dropped 0.39% to 15.15 to the dollar in early morning trade.