By Janice Kew July 20 (Bloomberg) -- South Africa’s rand strengthened to the highest level in almost two weeks against the dollar after Gill Marcus, chairwoman of Barclays Plc’s Absa Group Ltd., was named as successor to central bank governor Tito Mboweni. President Jacob Zuma yesterday named Marcus to replace Mboweni, 50, who has led the South African Reserve Bank since 1999. Marcus, 59, a former central bank deputy governor, is also chairwoman of the Financial Services Board, which regulates financial services companies, and a former deputy finance minister. “This change, to somebody within the system and is thought to reflect similar policy views to Mboweni, is a positive,” said Lars Christensen, head of emerging-market research at Danske Bank SA in Copenhagen. “There had been a view in the market that there was a risk, if Mboweni left, of radical change in monetary policy and the independence of the Reserve Bank would be undermined. This appointment has calmed those fears.” The rand gained as much as 1.4 percent to 7.9381 per dollar, the highest level since July 7. It was trading at 7.9363 against the U.S. currency by 5:07 p.m. in Johannesburg from 8.0519 late on July 17. It appreciated 0.7 percent against the euro to 11.2728. The appointment of Marcus is a signal that the government will continue a policy of price stability in Africa’s biggest economy, said Nazmeera Moola, an economist at Macquarie First South Securities. The Congress of South African Trade Unions, which backed Zuma’s rise to become South African president and did not support Mboweni’s reappointment, is demanding a review of the central bank’s inflation-targeting mandate adopted during Mboweni’s tenure. ‘Pragmatism’ The policy obliges the central bank to keep annual inflation within a range of 3 percent to 6 percent, forcing it to keep interest rates higher when the rate exceeds the target to constrain spending. Consumer inflation reached an annual 8 percent in May, the 26th consecutive month it has exceeded the central bank’s target. “The market likes the pragmatism shown with the appointment of Marcus as Mboweni’s successor, given her wealth of experience in a broad spectrum of activities related to finance and policy,” said George Glynos, the managing director of Johannesburg-based Econometrix Treasury Management. The rand also strengthened with other emerging-market currencies, including the Russian ruble, Polish zloty and Hungarian forint, as stocks gained on speculation of an improvement in the U.S. economy, spurring demand for higher- yielding assets and boosting precious metals prices. Bond “Risk aversion is at its lowest this year,” Glynos said. The gain in the rand “is a combination of factors,” including Marcus’ appointment, rising commodity prices and improved emerging-market sentiment, he added. The price of gold, which rivals platinum as South Africa’s biggest export earner, added as much as 1.7 percent to $954.68. Platinum rose 1.4 percent to $1,188.50 an ounce. Government bonds advance in South Africa, with the benchmark 13.5 percent security due September 2015 yielding 8.54 percent, three basis points lower than its July 17 close. The bond’s price, which moves inversely to the yield, climbed 19 cents to 123.30 rand. To contact the reporters on this story: Janice Kew in Johannesburg at jkew1@bloomberg.net.

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