Monday, 20 July 2009

Gill Marcus's credentials as a former central bank deputy governor and head of South Africa's largest retail banking group should reassure markets she is an able successor to respected outgoing governor Tito Mboweni.
Mboweni_Tito
Bowing out: SA's current Central Bank Governor, Tito Mboweni

Marcus's close links with the ruling ANC could also ensure more harmonious relations with powerful labour unions who have clashed with Mboweni over the past year over a monetary policy stance they say has worsened the plight of the poor.

President Jacob Zuma on Sunday appointed Marcus as Governor of the central bank with effect from November.

Zuma told reporters he had initially reappointed Mboweni for another term to the post but the Governor asked to leave in November.

Marcus, 59, served as deputy governor of the Reserve Bank between 1999 and 2004 and is credited with helping formulate exchange regulations which have helped shield South African banks from the worst of the global financial crisis.

The market's high regard for Marcus should soothe financial markets which took the government's silence on Mboweni's soon-to-expire contract as a sign that he would stay on.

"She's highly respected in the market place. She oversaw the foreign exchange regulations (as deputy governor) and she's actually quite a good administrator," Colen Garrow, economist at investment group Brait, said.

Marcus's history with the ruling African National Congress could however be a double edged sword.

Marcus, who is white, spent years in exile helping the ANC fight the apartheid system which discriminated against blacks, and on her return to South Africa gained prominence working in the party's information department.

She was elected to parliament on an ANC ticket in the country's first multi-racial elections in 1994, earning a reputation for efficiency as chair of the finance committee.

Marcus, the first woman to serve as deputy central bank governor, will likely enjoy a more amicable relationship with labour unions.

They wanted Mboweni out over the central bank's refusal to meet their demands for steep interest rate cuts,

But any indication of a closure relationship with labour could raise market fears of a departure from the existing prudent monetary policy.

Zwelinzima Vavi, general secretary of labour federation COSATU, welcomed Marcus's appointment, expressing hope that "she will bring in fresh air into the institution".

Reuters