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Lynley Donnelly , Boyd Webb and agencies19 Jul 2009 16:54
South African President Jacob Zuma on Sunday named Absa chairperson Gill Marcus as head of the central bank from November in a surprise appointment that will probably be welcomed by investors.
Zuma told reporters he had appointed Tito Mboweni for a third five-year term from August but the governor asked to leave in November. Mboweni’s contract comes to an end in just three weeks, on August 8.
Zuma said that he reappointed Mboweni as governor but he had indicated his wish to leave to “pursue other interests”.
Marcus, a former ANC activist, served as deputy governor of the Reserve Bank between 1999 and 2004.
Sources said she clashed with Mboweni during her tenure as deputy governor before resigning and some observers speculated at the time she might replace him in 2004.
Analysts said Marcus’s appointment may surprise investors who were mostly expecting Mboweni to stay, but she was well regarded by the financial community.
“She’s highly respected in the market place,” said Colen Garrow, economist at investment group Brait.
“She oversaw the foreign exchange regulations [as deputy governor] and she’s actually quite a good administrator.
I think the appointment won’t move financial markets.
Marcus (59) would not comment on policy on Sunday, saying it was premature for her to speak before joining the institution.
Mboweni was respected by markets for his efforts to fight inflation. He did not say what he would do after leaving the central bank, though added: ‘I have a bit more time to go fishing.”
Observers have been critical of the length of time it has taken for the presidency to provide certainty about Mboweni’s future and the stewardship of the central bank.
When asked why he had waited so long to provide clarity on this point, Zuma said: ‘In relation to what?”
Mboweni has served as governor for a decade and was appointed a year prior to taking over from Chris Stals.
Zuma made it clear that consultation around the appointment of a new governor had taken place between Minister of Finance Pravin Gordhan, the Reserve Bank board and the governor, ‘as provided for by the law”.
Marcus declined to comment on whether the bank under her watch would pursue inflation targeting, saying only that debates on the issue would take place down the line.
Economist Mike Schussler welcomed Marcus’s appointment but noted that policy changes regarding inflation targeting would have to come from the government.
“There will not be any policy changes. Inflation targeting is a policy from the treasury,” Schussler was quoted as saying by the South African Press Association.
The Congress of South African Trade Unions welcomed the change.
“We didn’t have a good relationship with Mboweni and so we are not going to be shedding any tears,” Zwelinzima Vavi, general secretary of Cosatu, said.
“We welcome the appointment of Gill Marcus and hope that she will bring in fresh air into the institution.”
Trade unions had called for big interest rate cuts to drive the economy out of recession and save jobs, but the central bank left its repo rate steady at 7,5% at its latest meeting last month after 450 basis points in cuts.
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