South Africa’s Currency Falls Again As Finance Minister Faces Fraud Charges

South Africa’s currency is once again suffering a crash after the finance minister of the country, Pravin Gordhan, got served with summons on October 11 over fraud charges.

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Pravin Gordhan is meant to appear in a Pretoria court on November 2nd. The prosecutors allege that the finance minister and two of his former colleagues from the South African Revenue Service committed fraud when Gordhan granted early retirement to one of the colleagues, then he later allowed him to return to work.

South Africa's currency

The charge is a far cry from the rumors that were circulating in May that the finance minister was going to be arrested over allegations of espionage and corruption carried out by a “rogue unit,” while he was head of the South African Revenue Service years ago.

When the rumors had started circulating in May, South Africa’s currency had nosedived and in August the rumors started up again leading to the same effect.

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With this summon, Gordhan faces a count of fraud and another for the unlawful extension of the former commissioner’s contract. South Africa’s currency immediately fell by as much as 3.4%. After a previous day closing at 13.91 rand to $1, the rand traded at 14.24 rand to $1 during the announcement of the summons.

South Africa's currency

The finance minister questioned the wisdom of issuing summons 15 days before he was meant to deliver his medium term budget speech. According to Business Day newspaper, he said;

“What is it about this country, and some in this country [politicians and those in the law], who choose these times to do these things? … Where are they [the elite policing unit know as the Hawks] getting their instructions from and for what purpose?”

The chief prosecutor, Shaun Abrahams, assured reporters that he was acting objectively but some people still consider the supposed rift between the finance minister and President Zuma to be behing Gordhan’s troubles.