SOUTH Africa’s rand strengthened in early trade on Friday as positive sentiment surrounding the appointment of a new finance minister helped offset the impact of a stronger dollar.
At 0734 GMT, the rand ZAR= traded at 14.4825 against the dollar, 0.1% firmer than its previous close, but off from three-week high hit on Wednesday.
President Cyril Ramaphosa on Thursday appointed the Development Bank of Southern Africa’s chair, Enoch Godongwana, as finance minister in a Cabinet reshuffle, replacing Tito Mboweni, who had asked to be excused from his position.
“Tito’s political capital was all spent and someone else who has the political capital to resist spending pressure is a positive move,” said Anchor Capital investment analyst Casey Delport.
“The real question, however, is whether Enoch Godongwana will stick to the debt limits that Tito has set, or if National Treasury will go back into tolerating slippage, as seen throughout much of the decade.”
Citi said the change was “neutral to slightly positive” given Godongwana’s strong support for Ramaphosa and many years pushing reform friendly ANC policies.
The dollar inched higher in the lead up to the release of U.S. employment data. Traders expect strong numbers that could make the case for faster U.S. policy tightening.
- Reuters
