Ramaphosa assures Zambia that Mboweni’s tweets are not view of SA’s government
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Outspoken finance minister Tito Mboweni was reprimanded by President Cyril Ramaphosa on Monday after he waded into the shock firing of the central bank governor in Zambia, which led to a sharp sell-off in that country’s assets.
In one of his tweets, Mboweni, who is a former governor of the SA Reserve Bank, promised to “mobilise” if not given reasons the that Zambian governor Denny Kalyalya had been fired by president Edgar Lungu.
The SA presidency said in a statement that Ramaphosa “wishes to assure the government and people of the Republic of Zambia that the unfortunate remarks do not reflect the views of the SA government and its people”.
Mboweni had tweeted that African presidents needed to “stop this nonsense” of firing central bank governors.
“That governor was a good fella. Why do we do these things as Africans? The president of Zambia must give us the reasons why he dismissed the governor — or else hell is on its way. I will mobilise!”
The rand was not affected by the news, firming to its best level in three weeks and breaking below R17/$, supported by developments in the search for Covid-19 treatment.
Nolan Wapenaar, co-chief investment officer at Anchor Capital said he thought Mboweni's reprimand did not really matter to the markets. “Nothing is going to come out of it and politicians get reprimanded all the time.”
In Zambia, however, Kalyalya’s dismissal caused the country's currency and Eurobonds to plunge.
This also comes at a critical time for the economy of Africa’s second-biggest copper producer, which is forecast to contract 4.2% in 2020 with annual inflation lingering near 16%. Debt is soaring and the fiscal deficit rapidly increasing as the coronavirus pandemic curbs revenue.
Zambia’s kwacha had fallen 0.6% by 11.47am in Lusaka to a record low 19.1863/$. The nation’s $1bn of Eurobonds due in 2024 fell as much as 5.7% to to 54.07c on the dollar, the most since April.
On Saturday, Lungu named Christopher Mvunga as Kalyalya’s replacement. The former deputy secretary to the cabinet and deputy finance minister will have to contend with the world’s second-worst performing currency, which has lost more than a quarter of its value against the dollar in 2020. He will also need to limit the government’s growing dependence on the central bank to cover funding shortfalls.
“It is quite surprising because Dr Kalyalya has performed sterlingly under very extreme circumstances,” ...
In one of his tweets, Mboweni, who is a former governor of the SA Reserve Bank, promised to “mobilise” if not given reasons the that Zambian governor Denny Kalyalya had been fired by president Edgar Lungu.
The SA presidency said in a statement that Ramaphosa “wishes to assure the government and people of the Republic of Zambia that the unfortunate remarks do not reflect the views of the SA government and its people”.
Mboweni had tweeted that African presidents needed to “stop this nonsense” of firing central bank governors.
“That governor was a good fella. Why do we do these things as Africans? The president of Zambia must give us the reasons why he dismissed the governor — or else hell is on its way. I will mobilise!”
The rand was not affected by the news, firming to its best level in three weeks and breaking below R17/$, supported by developments in the search for Covid-19 treatment.
Nolan Wapenaar, co-chief investment officer at Anchor Capital said he thought Mboweni's reprimand did not really matter to the markets. “Nothing is going to come out of it and politicians get reprimanded all the time.”
In Zambia, however, Kalyalya’s dismissal caused the country's currency and Eurobonds to plunge.
This also comes at a critical time for the economy of Africa’s second-biggest copper producer, which is forecast to contract 4.2% in 2020 with annual inflation lingering near 16%. Debt is soaring and the fiscal deficit rapidly increasing as the coronavirus pandemic curbs revenue.
Zambia’s kwacha had fallen 0.6% by 11.47am in Lusaka to a record low 19.1863/$. The nation’s $1bn of Eurobonds due in 2024 fell as much as 5.7% to to 54.07c on the dollar, the most since April.
On Saturday, Lungu named Christopher Mvunga as Kalyalya’s replacement. The former deputy secretary to the cabinet and deputy finance minister will have to contend with the world’s second-worst performing currency, which has lost more than a quarter of its value against the dollar in 2020. He will also need to limit the government’s growing dependence on the central bank to cover funding shortfalls.
“It is quite surprising because Dr Kalyalya has performed sterlingly under very extreme circumstances,” ...
