The SA rand has bounced back since NPA’s announcement that the finance minister Pravin Gordhan is off the hook of its charges.
The rand which was trading at R13.75 earlier this morning, rapidly recovered in value against the dollar after National Prosecutions Authority head advocate Shaun Abrahams withdrew the charges against Pravin Gordhan.
The rand skyrocketed to R13.61 per US dollar before settling to R13.63 as the news began to spread.
South Africans had panicked since the news of the finance minister’s summons. Foreign investors also feared that like in Nhlanhla Nene’s case, the South African economy will be grounded if the fraud charges against him lead to his removal as the finance minister.
A few of the investors had even at a point lost hope of investing in the country’s economy following series of political instability which has undermined the growth of the economy.
The latest announcement is indeed good news to both domestic and international marketers and of course the entire South Africans who have been on the receiving end of the heat between the treasury and the prosecution authority.
The summons had been argued to be unlawful and also cost the country more than a million even as the country wriggles in high debt costs.
However, Shaun Abrahams announced during a media briefing that Gordhan did not act with criminal intentions when he approved former senior South African Revenue Service official Ivan Pillay’s early retirement.
Business leaders, on the other hand, have shown their strong support for the finance minister who they believe will help bring back the economy to its feet through his measures that will further tighten the country’s belt on spending.
Abrahams said Pillay and Magashula had made representations to indicate there was no intention to commit any crime with the approval of early pension for Pillay.
He also condemned peoples dependent on Gordhan as the backbone of the nation’s economy saying the economy does not depend on one man and that it would have been wrong to have considered the political climate when making the decision.
Meanwhile, Economist Dennis Dykes who confirmed the strengthening of the SA rand following Abrahams’ announcement said he hopes the drama involving Gordhan is gone for good.
“If you look at the rand it is probably about 10% weaker than it otherwise would have been had we not had all the political noise during the course of this last year,” he said.