The South African rand (Exchange: ZAR=) rallied on Monday after the country's embattled president, Jacob Zuma, bowed to market and political pressure and appointed his third finance minister in five days.
The benchmark Johannesburg All Shares Index traded as much as 2 percent higher on Monday, before paring gains, and shares in South Africa's banking index soared up to 16 percent on the news that Zuma had replaced his new finance minister with the more experienced Pravin Gordhan late on Sunday.
The currency gained up to 5.2 percent against the U.S. dollar (Exchange: ZAR=), 5.5 percent versus the euro (Exchange: ZAREUR=) and 5.7 percent against sterling (Exchange: ZARGBP=).
Zuma's U-turn came after the president sacked the previous finance minister , Nhlanhla Nene, last week and replaced him with outsider David van Rooyen. He then changed his mind following a wave of criticism and turmoil in currency, credit and equity markets at the end of the week.
"On the 9th of December 2015, I announced the appointment of a new Minister of Finance, Mr David van Rooyen. I have received many representations to reconsider my decision. As a democratic government, we emphasize the importance of listening to the people and to respond to their views," Zuma said in a statement on the South African government news agency late on Sunday.
"In this regard, I have, after serious consideration and reflection, taken the following decision; I have appointed Mr Pravin Gordhan, the current Minister of Cooperative Governance and Traditional Affairs as the new Minister of Finance."
Gordhan previously held the role of finance minister between 2009 and 2014, before becoming minister of cooperative governance and traditional affairs in May last year.
The rand is seen posting its strongest daily percentage gain on Monday since 2008, according to Reuters, due to relief at Gordhan's appointment.
London-listed shares of Investec (London Stock Exchange: INVP-GB) and Old Mutual (London Stock Exchange: OML-GB) — two international banks that were founded in South Africa — traded as much as 10 percent higher on Monday, putting them among the top-performing stocks across Europe.
However, the revolving door at South Africa's finance ministry highlights doubts about Zuma's judgment.
Both Fitch Ratings and Standard & Poor's (S&P) have cut their ratings and outlooks on South Africa's sovereign debt earlier this month.Both Fitch Ratings and Standard & Poor's (S&P) cut their ratings and outlooks on South Africa's sovereign debt earlier this month.