JOHANNESBURG, Feb 29 (Reuters) – South Africa’s rand firmed against the dollar on Monday after President Jacob Zuma said he was not at war with Finance Minister Pravin Gordhan, following media reports of a fallout.
The currency fell nearly 4 percent on Friday, its biggest daily loss since 2011, after Gordhan said there were attempts to discredit him and the integrity of the Treasury.
Gordhan’s statement followed a newspaper report which quoted sources as saying he had threatened to resign after receiving a letter from the elite Hawks police unit questioning his knowledge of a suspected rogue unit at the revenue service.This followed media reports of a clash between Gordhan and the head of the South African Revenue Service (SARS).
The Hawks also said they were not investigating Gordhan, and there was no case against the minister.
“The media has incorrectly reported, among other things, that there is a war at SARS and that the President and the Minister of Finance are somehow at war. This is a total fabrication and mischievous sensationalism,” the presidency said in a statement.
“The President wishes to emphasise that Minister Gordhan remains the Minister of Finance and any positing that the position of the Minister is under any threat is dismissed with the contempt it deserves.”
As of 1344 GMT, the rand had firmed 1.45 percent to 15.9260 versus the dollar from Friday’s close of 16.1600.
Government bonds also recovered. The yield on the benchmark instrument due in 2026, which soared as much as 28 basis points in early trade, was up 4.5 basis points to 9.41 percent as of 1434 GMT.
“It is a case of correction following knee jerk selling on Friday. The markets will continue to keep a close eye on narrative and look for further confirmation Gordhan will be allowed to do his job,” NKC African Economics economist Bart Stemmet said.
On the stock market, both the Top-40 index and the broader All-share were largely unchanged.
Barclays Africa Group Ltd fell as much 6 percent when the market opened, and traded 5 percent lower after Barclays Plc said on Sunday its board was evaluating strategic options in relation to its shareholding in its African business.
Statement from the Presidency
The Presidency wishes to remind all interested parties of the need to respect the institutions and processes created in terms of the Constitution and the law, in light of the media reports over the weekend relating to the South African Revenue Services (SARS) and the Minister of Finance, Mr Pravin Gordhan.
Media reports demanding that the President should summarily dismiss the SARS commissioner or interfere with the work of government agencies are unhelpful. There are prescripts within government which stipulate the processes to be utilised to resolve labour relations issues or disputes within the work environment.
The difficulty in the relationship between the Minister of Finance and the SARS Commissioner is being dealt with through the correct channels using the correct legal prescripts. The President began discussions with Minister Gordhan and Mr Moyane on this matter long before the State of the Nation Address and Budget2016. Measures are being put in place to address the issues responsibly and amicably, for the benefit of all. We urge interested parties to exercise calm and restraint and allow space for the matters to be resolved using correct channels.
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There is also a need to ensure accuracy in the reporting of this matter.
The media has incorrectly reported, among other things, that there is a war at SARS and that the President and the Minister of Finance are somehow at war. This is a total fabrication and mischievous sensationalism.
Other reports have insinuated that the position of Minister Gordhan could be in jeopardy. The President wishes to emphasise that Minister Gordhan remains the Minister of Finance and any positing that the position of the Minister is under any threat is dismissed with the contempt it deserves.
