New South African minister vows stability to tackle rand collapse

South Africa’s new Finance Minister Pravin Gordhan vowed Monday to stabilise the economy after his predecessor lasted just four days in the job amid a dramatic slump in the rand.

“We will stay the course of sound fiscal management,” Gordhan told reporters. “Our expenditure ceiling is sacrosanct. We can have extra expenditure only if we raise extra revenue.

“The facts about the developments that took place last week and the response of the financial markets are well-known,” he added.

“Our currency fell, the stock market dropped by 2.94 per cent and bond yields shot up by over 150 basis points.

“Our government is acutely aware of the financial impact this had on those who are invested in this economy.”

President Jacob Zuma last week ousted respected finance minister Nhlanhla Nene in favour of the little-known David van Rooyen, triggering a backlash that pushed him into a U-turn on Sunday when Rooyen himself was removed.

Gordhan, who served as finance minister from 2009 to 2014, was re-appointed to the role to try to calm markets after the rand fell to an all-time low of 16 to the dollar when Nene was fired.

The political tumult unnerved many investors in South Africa, which is beset by high unemployment, slow growth and accusations of worsening government corruption.