Finance Minister Pravin Gordhan. File picture: Siphiwe Sibeko

Johannesburg - The rand strengthened the most in more than two weeks after the head of the National Prosecuting Authority (NPA) said yesterday that he was willing to review the decision to charge Finance Minister Pravin Gordhan with fraud.

The currency jumped as much as 2.5 percent against the dollar, the most since September 27, and was 1.4 percent stronger at R14.1756 per dollar by 4.39pm yesterday. The currency earlier weakened as much as 0.8 percent, falling for a second day after Gordhan said on Tuesday he had been summoned to appear in court. By 5pm the rand was at R14.256 to the dollar.

Benchmark government bonds also reversed their losses, the yield falling 6 basis points to 8.88 percent.

“I am more than willing to review any matter if somebody applies to review that matter,” NPA head Shaun Abrahams told lawmakers in Cape Town yesterday. “Minister Gordhan can submit representations to me and ask me to review the matter and I would certainly look into the matter.”

Abrahams announced on Tuesday that Gordhan would be charged with fraud relating to the early retirement of a former colleague at the tax agency.

Yesterday Treasury director-general Lungisa Fuzile said the Treasury was fielding calls from concerned investors.

Investors “are concerned and indeed some of the movements in the currency do reflect that”, Fuzile said in an interview with Bloomberg TV. “Any noise or development of the kind we saw yesterday (Tuesday) would unnerve investors, but we hope that in time they will see through this and as things settle down the rand might regain its strength.”

While the news of the summons “does unsettle things a bit”, the Treasury remained resolute to present the medium-term budget policy statement on October 26 “as a team, led by minister Gordhan and Deputy Minister Mcebisi Jonas”, Fuzile said.

The budget will be closely watched by rating companies as South Africa risks losing its investment grade credit rating.

No one from the rating companies had contacted him since the news of Gordhan’s summons, Fuzile said.

S&P Global Ratings and Fitch Ratings, both to consider their credit assessments in December, kept their ratings at one level above junk in June, and S&P kept its outlook at negative. The companies said the government should take decisive steps to bolster growth, quell policy uncertainty and end political turmoil.

Moody’s Investors Service is scheduled to review its rating, which is at two levels above junk, on November 25.

The Johannesburg Chamber of Commerce and Industry (JCCI) said yesterday that it noted “with concern the latest developments involving Finance Minister Pravin Gordhan”.


The business organisation said it had raised concerns about the short-to-medium term stability at the Treasury, “especially at a time when the economy remains fragile”.

Ernest Mahlaule, the president of the JCCI, said: “It is of paramount importance to ensure that due care is taken as the legal processes unfold so that investors are reassured about the rule of law in South Africa and that the country’s reputation as a viable investment destination is not harmed.”

Meanwhile, Goldman Sachs said divisions within the ANC were deepening and a potential downgrade was not fully priced in by markets.

The rating companies said the government should take decisive steps to bolster growth.