Minister of Finance Enoch Godongwana. (Jeffrey Abrahams/Gallo Images)
The swift formation of a new coalition government in South Africa after May elections has bolstered investor confidence and fuelled a rally in the nation’s currency and the stock market, Finance Minister Enoch Godongwana said.
“The markets were looking for stability and the formation of the government of national unity in a very short period gave that stability,” Godongwana said in an interview.
The rand has rallied 3.7% against the dollar since the announcement of the new cabinet, with the FTSE/JSE All Share Index gaining 6.6% over the same period. This positive growth follows the formation of a new coalition government after the African National Congress lost its parliamentary majority and entered into an alliance with other parties.
Furthermore, there have been discussions about a common digital currency within the BRICS group of nations, with ongoing talks about a common payment system. This complex issue is being carefully considered by central banks worldwide.
Overall, the quick establishment of the new government in South Africa has injected confidence into the financial markets, leading to positive growth and stability.
For more financial news, visit the News24 Business front page.
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