Economy: rand falls after Manuel resigns

2008-09-23 00:00

Finance Minister Trevor Manuel’s “duty-bound” resignation from his post yesterday caused unnecessary distress on the JSE and the currency market — and was very poorly managed.

This was the view of Business Unity South Africa (Busa) chief operating officer Vic van Vuuren, who spoke to The Witness yesterday in reaction to news that although Finance Minister Trevor Manuel and his deputy, Jabu Moleketi, have resigned, both are ready to serve under a new administration.

The business community, economists and other commentators reacted with shock and disappointment following the unexpected news.

Euities on the JSE and the rand both weakened sharply after the news, but recovered later in the afternoon, although the rand remained vulnerable.

Standard Bank Chief Economist Goolam Ballim told The Witness that although it was an unwelcomed development, Manuel probably had no intention of misleading the nation.

“Director-generals are perhaps the next area to watch. This would definitely create a vacuum.” Ballim said the markets will remain “jittery” until finality is reached.

South African Chamber of Commerce and Industry (SACCI) president Professor Alwyn Louw said the chamber is concerned about continuity in the Finance Ministry.

He added that clarity over this issue is vital.

“In the international economy, we must accept that people move capital where they find certainty. We are so dependent on foreign investment that we cannot afford uncertainty.”

Pietermaritzburg Chamber of Business CEO Andrew Layman said he hopes Manuel will be appointed to continue in this vital portfolio.

“It is not a suitable time for there to be wholesale changes to the country’s executive, although it must be conceded that a political watershed has been reached and ‘business as usual’ will be neither possible nor wise.”

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