Johannesburg - The removal of former finance minister Nhlanhla Nene in December didn’t trigger the collapse of South Africa’scurrency, President Jacob Zuma said.
“The rand had been going down when Nene was there, it had been going down for months and months,” Zuma said in an interview with Johannesburg-based eNCA. “It was not triggered by the decision.”
The rand fell to what was then a record low against the dollar and the Johannesburg Stock Exchange lost R170 billion ($10.2 billion) in the two days after Zuma replaced Nene with little-known lawmaker David van Rooyen.
Zuma days later replaced Van Rooyen with former finance minister Pravin Gordhan.
“I think people did not understand, I think that there was an exaggeration in terms of the reaction, there is no single person that can collapse a department, particularly a department like the Treasury,” Zuma said.
“There was an overreaction to the decision. It’s not like breaking the economy.”
The rand plummeted by the most in more than seven years on Monday as the market turmoil in China and a drop in US stocks deterred risk-taking. The currency of Africa’s second-largest economy weakened as much as 9 percentto an all-time low before trading 2.3 percent lower at 16.6803 per dollar as of 8.28am in Johannesburg.
Yields on South Africa’s rand-denominated government bonds due in December 2026 climbed 36 basis points to 9.9 percent, the highest on a closing basis since December 14.
BLOOMBERG