The rand gained 0.5% against the dollar on Wednesday evening in the wake of President Cyril Ramaphosa’s announcement of his new Cabinet.
Ramaphosa, speaking from the Union Buildings in Pretoria in a televised address, announced that Pravin Gordhan would stay on as minister of public enterprises. Tito Mboweni retained his position as minister of finance.
“There are no real surprises in the Cabinet,” said TreasuryONE in a snap note to clients.
The local currency opened the day at R14.73/$ and fell by 1% in early trade before making up its earlier losses into the afternoon. By 20:50, minutes before Ramaphosa started to speak, it was at its opening price. At 22:22 it was changing hands at R14.66/$, up 0.5%.
Lukman Otunuga, a research analyst at FXTM, said in a note to clients earlier in the day that the local currency was facing a “tornado of different risks”.
“The rand does not like the headlines that David Mabuza is in the running to become deputy president,” said Otunuga. Mabuza was reappointed as deputy president on Wednesday evening.
Analysts have warned that while the rand may strengthen in the wake of the Cabinet announcement, uncertainty around US-China trade talks and Brexit is still likely to dampen demand for emerging markets currencies.