Johannesburg - South African bonds and the rand rallied after President Jacob Zuma said he had “full confidence” in finance minister Pravin Gordhan, allaying concern that the Treasury chief could be replaced amid an investigation into irregularities at the tax authority.
The rand strengthened 1.2 percent to 13.9896 per dollar at 11:31 a.m. in Johannesburg, heading for the biggest gain in three weeks. The yield on rand-denominated bonds due in December 2026 dropped nine basis points to 8.96 percent.
The rand plunged more than 5 percent in two days after Gordhan was summoned to report to a special police unit investigating alleged irregularities at the tax authority, which he led until 2009.
The finance minister said on Wednesday he had done nothing wrong and wouldn’t report to the so-called Hawks unit.
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The presidency said in a statement on Thursday that Zuma “wishes to express his full support and confidence in the minister of finance and emphasises the fact that the minister has not been found guilty of any wrongdoing.”
BLOOMBERG