- Gordhan reportedly threatened to resign over tax chief
- Investor sentiment `has evaporated': Standard Bank's Butler
South Africa’s rand slumped the most in more than four years and benchmark bond yields soared amid concern a dispute between Finance Minister Pravin Gordhan and his tax chief is deepening a power struggle over control of the National Treasury.
The rand weakened by the most on a closing basis since September 2011, falling 3.9 percent to 16.2333 by 2:20 p.m. in New York. It was one of the biggest declines among more than 150 currencies tracked by Bloomberg. Yields on government bonds maturing in Dec. 2026 climbed 16 basis points to 9.42 percent, the highest on a closing basis since Jan. 28.
Gordhan said on Friday that Tom Moyane, the South African Revenue Service commissioner appointed by President Jacob Zuma in 2014, showed “totally unacceptable” behavior by defying orders to halt a management and systems overhaul. Gordhan threatened to resign after Zuma told him that Moyane should keep his post, Johannesburg’s Business Day newspaper reported, citing people in the government it didn’t identify. Zuma’s spokesman Bongani Majola issued a statement expressing “full confidence” in Gordhan.
“Investor sentiment has evaporated after the new Gordhan/Moyane nonsense that has hit the wires today,” Warrick Butler, head of emerging-market spot trading at Standard Bank Group Ltd., said in an e-mail. “The buying is all offshore real-money accounts -- asset managers, pension funds and so on -- putting back their dollar hedges again.”
Zuma reappointed Gordhan as finance minister, a post he had held from 2009 to 2014, in December after his decision to install little-known lawmaker David van Rooyen sparked a selloff in the rand and the nation’s bonds.