The rand, which had tumbled 5 percent since Tuesday in response to the investigation, picked up on Friday as the dollar retreated, with investors awaiting a speech by the Federal Reserve for clues on a rate hike in the United States.
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It is a good way of looking at the cold war between the President of the country and Finance Minister, it is really an extraordinary situation.
“The Presidency wishes to also emphasise that President Zuma does not have powers to stop any investigations into any individual/s”, it said, adding that Zuma could not bring a halt to the probe even if it was negatively affecting the economy.
“It’s still driven by what is happening in the currency and there are still other factors internationally, we still are waiting for what’s going to be said from the Fed”, said Afrifocus securities portfolio manager Ferdi Heyneke.
However, after the latest news surrounding the finance minister, the rand has weakened substantially.
Yesterday the ANC Youth League also said Gordhan should have co-operated fully with the Hawks by meeting them to avoid what it called “unnecessary drama that will strain the currency”. It’s set for the largest weekly slump since the five days through December 11, the period when Zuma fired then-Finance Minister Nhlanhla Nene and replaced him with a little-known lawmaker. “Thus, we believe that in time Comrade Pravin Gordhan will be cleared of the purported charges”, the organization said.
Zuma’s team and the Treasury under Gordhan have disagreed about government spending, including at loss-making state companies like South African Airways, analysts say.
“It was an ambiguous vote of confidence in Pravin Gordhan which would suggest that the agencies supposedly investigating Pravin Gordhan will be given relatively free rein to continue these investigations”, said Daniel Silke, a director at Political Futures Consultancy. “Political heavyweights, including the deputy president, have come out in support of Gordhan, but the Hawks and their supporters might still take the plunge”. Two former officials of the tax service presented themselves to the police.
Hawks spokesman Hangwani Mulaudzi declined to comment.
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According to Calland, President Zuma needs Pravin Gordhan out of the way, which is why he is using the Hawks to undermine and intimidate him.
