Reserve Bank Governor Lesetja Kganyago
Photo by: Reuters
The appointment of a new leader of South Africa's ruling party has removed political uncertainty that contributed to the depreciation of the rand currency and has been welcomed by investors, the country's central bank governor said on Wednesday.
The new leader of the ruling African National Congress (ANC), Cyril Ramaphosa, narrowly won the race to succeed President Jacob Zuma as party leader in December.
South Africa's rand currency has surged since Ramaphosa - the deputy president - won the contest. It steadied against the dollar early on Wednesday, holding at a two-and-a-half-year high. At 0645 GMT it traded at 12.0300 per dollar.
"The depreciation of the rand last year was overdone and it was overdone because there was so much political uncertainty," said South Africa Reserve Bank Governor Lesetja Kganyago.
"High frequency indicators in South Africa do show that the South African economy is demonstrating a resurgence," he told Reuters speaking on the sidelines of the World Economic Forum meeting of business and political leaders in Davos.
"For a long time we had spelled out that the exchange rate is sensitive to the political uncertainty. The uncertainty is gone," he added.