Pravin Gordhan Confident South African Financial Sector Will Withstand Brexit Shock

BY NTSAKISI MASWANGANYI
Business Day, South Africa
24 JUNE 2016, 14:38

FINANCE Minister Pravin Gordhan on Friday said trade links between SA, the EU and Britain are strong and that the local resilient financial sector can withstand any financial shocks.

Gordhan was responding to a decision by the UK to leave the EU following a referendum.

He reassured the public that the country’s banking and financial institutions are well positioned to withstand financial shocks, and expressed confidence that SA’s banks and regulatory frameworks are “extremely resilient and reliable.”

The National Treasury and the Reserve Bank were “keenly monitoring” developments in the UK and their implications for SA, Gordhan said. Monitoring would continue over the next few days.

Gordhan urged business, labour and the government to continue co-operating to support investor confidence.

Business Unity SA (Busa) CEO Khanyisile Kweyama said the long-term implications of Brexit on the local economy were yet to be fully understood.

Of particular concern was Brexit’s immediate effect on the rand and local markets, she said.

The rand tumbled more than 7% to R15.67/$ following the news, but has since recouped some of those losses.

Busa had supported the “Remain” vote given significant trade with the EU.

The business lobby group would monitor developments and stood ready to engage with the government “with a view to positioning SA appropriately”.