Wayne McCurrie, a financial analyst at Ashburton Investments, has warned that the fallout of the Gordhan saga will lead to a significant rise in the price of petrol.<\/p>\n
McCurrie said that with the rand back above R14 against the dollar, and the oil price above $52 ‘means that petrol will increase significantly next month, if everything remains the same’.<\/p>\n
The global benchmark Brent crude price was trading at around $52.60 a barrel on Wednesday, while the rand was at R14.37 by 09h15, having weakened as much as 3.9% against the dollar on Tuesday.<\/p>\n
News24 reported that bank stocks lost R34 billion on Tuesday after finance minister Pravin Gordhan was summoned to appear in court on fraud charges.<\/p>\n
Prosecutors alleged Gordhan illegally authorised a colleague\u2019s early retirement and established an illicit investigative unit when he was the head of the national tax agency almost a decade ago.<\/p>\n
Gordhan said the move is politically motivated and without merit. He is due to appear in court on November 2, one week after he\u2019s expected to deliver South Africa\u2019s mid-term budget.<\/p>\n
McCurrie warned that if Gordhan is forced out of office, South Africa would likely go into recession amid a collapse in the local currency, a rise in interest rates, and inflation.<\/p>\n
Neil Roets, CEO of Debt Rescue said that legal action against Gordhan will have severe consequences for deeply indebted South Africans.<\/p>\n
Roets said it may lead to downgrades by all three ratings agencies long before the end of the year and a significant weakening of the rand forcing the Reserve Bank to increase the interest rate.<\/p>\n
Independent economist Dawie Roodt, said said the major price hikes so far in 2016 – resulting from the prolonged drought – would see further hikes when the economy had to cope with the impending downgrades by ratings agencies and an interest rate increase that was almost certain to follow.<\/p>\n
Zuma\u2019s \u2018war\u2019 for Treasury has just begun: analyst<\/strong><\/a><\/p>\n