The rand broke through R15 against the US dollar in evening trade on Wednesday after President Jacob Zuma announced the removal of Finance Minister, Nhlanhla Nene.
“I have decided to remove Mr Nhlanhla Nene as Minister of Finance, ahead of his deployment to another strategic position,” Zuma said in a statement.
The presidency didn’t elaborate on the move, but announced Nene’s replacement, ANC member of parliament, David Van Rooyen.
Van Rooyen is the whip of the standing committee on finance and whip of the economic transformation cluster.
He is a former executive mayor of Merafong Municipality and a former North West provincial chairperson of the South African Local Government Association.
The rand slumped by more than 5% against the greenback shortly after the announcement was made, reaching a new record low of R15.3857, before regaining some ground to trade 2.17% weaker (R14.94) at 23h55 in Johannesburg.
The local currency was also weaker against the euro and British pound – at R16.46 (-3.52%), and R22.67 (-3.31%) respectively.
Political analyst Daniel Silke told Fin24 that the removal of Nene sent the wrong signals about South Africa’s already ailing economy.
Silke said the replacement of Nene will be questioned by anxious domestic and foreign investors alike on issues of fiscal prudence discipline going forward.
“This is the shortest reign of a finance minister and will create further doubts about cohesiveness of South Africa’s economic policy. Questions will be asked of Mr Nene’s replacement. Will he for example apply continuity of policy?”