The south African currency rand plunged more than any other major currency on Monday after President Jacob Zuma, told the Finance Minister Pravin Gordhan to return home a day after he departed for the week of investor roadshow in London and the U.S.
The Presidency gave no reason for calling off the trip, which the Treasury said had prior approval, and the ruling African National Congress said it had not received prior notice of the decision.
Speculation that Gordhan is on the verge of being fired has gone on for months, as he clashed with Zuma over the management of state companies and the national tax agency.
Gordhan has led efforts to keep spending in check and fend off a junk credit rating.
Zuma wants to embark on “radical economic transformation” that he says will tackle racial inequality and widespread poverty.
The rand weakened the most since November 10, dropping 3.2 percent against the dollar. The currency also slipped further 0.8 percent to 12.8386 by 7:45am in Johannesburg on Tuesday.
If Gordhan or his deputy, Mcebisi Jonas, are fired, “the selloff will be vigorous,” said Jonathan Hertz, chief executive officer of Peregrine Holdings Ltd., which has 105 billion rand in assets under management. “There will be a shudder in the market.
Zuma named Gordhan, 67, finance minister in December 2015 after his decision to install a then little-known lawmaker to replace the respected Nhlanhla Nene, which became known as “Nenegate,” hammered the nation’s bonds and currency and spurred ANC and business leaders to plead with him to reconsider.