Rand slightly firmer on Cyril Ramaphosa’s new cabinet

Picture: REUTERS
Picture: REUTERS

The rand reversed losses on Wednesday and was slightly firmer after President Cyril Ramaphosa announced a new cabinet that retained ministers in key positions, such as public enterprises and finance, as he tries to root out corruption and implement reforms.

The rand was flat ahead of Ramaphosa’s delayed address, but strengthened about 0.4% to R14.67/$ after the announcement, about 22c off its intraday low of R14.8935/$.

The announcement was not too far off expectations, said Citigroup economist Gina Schoeman.

"The first box to tick was the reduction in cabinet, the second to tick was continuity in [Tito] Mboweni [as finance minister]," she said.

Pravin Gordhan’s return as public enterprises minister could also be viewed positively, but new trade and industry minister Ebrahim Patel would need to be "transparent very soon" with regard to what his ministry was planning.

She also said Gwede Mantashe should be able to hold up a merger between the mineral resources and energy departments.

Ramaphosa had also signalled that more changes were coming.

President Cyril Ramaphosa announced his 2019 cabinet at the Union Buildings in Pretoria, May 29 2019.

Business Unity SA CEO Tanya Cohen said it was pleased about the reduction in the number of ministries "although it’s still a large cabinet. The continuity in terms of the finance minister was a positive thing.

Saftu general secretary Zwelinzima Vavi, however, took a more pessimistic approach, saying there would be "no change in direction".

Trade union federation Cosatu spokesperson Sizwe Pamla said it welcomed the "balanced administration".

"The president delivered on some of his key promises."

Black Business Council president Sandile Zungu said it was pleased with the "mixture of fresh, young blood".