Lesetja Kganyago Appointed South African Central Bank Governor

South African President Jacob Zuma appointed Lesetja Kganyago on Monday as central bank governor, as expected by financial markets, replacing the respected Gill Marcus whose five-year term ends on November 8.

The rand strengthened after the appointment of Kganyago, who is equally well-regarded by markets and economists as a staunch guardian of the independence of the central bank in Africa's most advanced economy.

Kganyago, who will take over as head of the bank on Nov. 9, said its primary objective was to protect the value of the rand in the interest of balanced and sustainable growth, as well as ensuring the stability of prices and the financial system.

"I have no doubt that eyes will be on me," he said, vowing to pursue the bank's mandate "without fear, favour or prejudice".

"I shall not disappoint," he told a news conference.

Analysts surveyed by Reuters had predicted the 48-year-old deputy governor, who has also served as Director General at the finance ministry, would get the post ahead of fellow deputy governor Daniel Mminele.

Kganyago had more political capital than Mminele and would probably gain the ear of the Treasury and other government departments more easily as a result, the analysts said.

The rand rallied to a session high of 11.2590 on the appointment.

"We view the decision as a positive for South African monetary policy going forward, with Mr Kganyago likely to continue to pursue the bank's mandate of price stability while at the same time remaining sensitive to the challenges the economy continues to face," said Jeffrey Schultz, an economist at BNP Paribas Cadiz Securities.

The Reserve Bank has increased interest rates by 75 basis points this year, tempering its concerns about rising inflation with the need to ease pressure on the struggling economy.

Kganyago will chair the bank's last policy meeting of the year on Nov. 18-20.

Source: Reuters Africa
South Africa 925599131897318359

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