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Rand plunges to three-week low after report that Pravin Gordhan was summoned by Hawks

The rand fell to its weakest level against the dollar in three weeks after the Daily Maverick said The Hawks had ordered Finance Minister Pravin Gordhan to report to its offices on Thursday, raising concern the treasury chief may be replaced.

Gordhan was informed he would receive a “warning statement” given to accused persons before they are charged with an offence and to warn them of their rights, the news website reported, without saying where it got the information. Former tax officials Ivan Pillay, Johann van Loggerenberg, Adrian Lackay and Andries van Rensburg have been sent letters informing them of the charges against them, according to the Daily Maverick.

The rand plunged as much as 2% to 13.9816 per dollar, the weakest level since August 3, after trading as much as 1.1% stronger earlier. The currency was 1.4% weaker at 6.15pm, the worst performance out of 31 major and developing-nation currencies monitored by Bloomberg.

“It’s political turmoil and investors in the international market don’t like that there’s a possibility that Pravin Gordhan could go as finance minister,” Wichard Cilliers, a trader at Treasuryone in Pretoria, said by phone.

“They see him as a credible finance minister. That’s why there’s the initial selloff in the market and that’s why it’s very jittery.”

The Sunday Times reported in May that Gordhan may face dismissal and arrest on espionage charges for setting up the South African Revenue Service’s National Research Group to spy on politicians including President Jacob Zuma. Gordhan denied any wrongdoing and said he was being harassed by people intent on manipulating the justice system for political gain.

Treasury spokesperson Phumza Macanda and Hawks spokesperson Hangwani Mulaudzi didn’t answer calls to their mobile phones. Lackay couldn’t immediately comment when contacted by phone. – Bloomberg

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