South Africa's rand sinks on report finance minister told to report to police

JOHANNESBURG (Reuters) - South Africa's rand plunged nearly three percent on reports that Finance Minister Pravin Gordhan had been ordered to report to a special police unit by the end of the week. The rand sank to a three-week low before recovering slightly. At 1715 GMT, it was 2.5 percent lower at 13.9200 per dollar, its weakest since Aug. 3. National treasury spokeswoman Phumza Macanda confirmed that Finance Minister Pravin Gordhan received correspondence from the special police unit, the Hawks. A local news site reported that he had been told to report to the police unit. The Hawks are investigating a surveillance unit within the South African Revenue Service set up in 2007 when Gordhan was the commissioner of the revenue authority. Local media reported in May that Gordhan might face arrest for setting up the unit to spy on politicians, including President Jacob Zuma. The rand had regained some of the previous weeks' losses as investors bought back into emerging assets on renewed expectations that U.S. interest rates would rise soon. The move against Gordhan ended that rally. South African stocks rose on Tuesday as investors waited for more clues on whether the Federal Reserve would raise U.S. interest rates this year. The benchmark Top-40 index was up 0.31 percent to 46,139 points. The broader All-share index was 0.24 percent higher at 52,957 points. Shares in insurance provider Santam ended 1.5 percent higher to 223.5 rand after the company acquired an insurance support services firm, Rand Merchant Investments' structured insurance division (RMB-SI), for an undisclosed amount. Africa's largest retailer, Shoprite Holdings, shed 0.23 percent to 198.53 rand. The retailer, which trades in 14 other countries in Africa, rose as much as 2.34 percent to 203.65 rand after the company reported a 17 percent jump in full-year profit on Tuesday. Trade was below par with around 202 million shares changing hands, compared with last year's daily average of 296 million, according to preliminary bourse data. Government bonds were weaker, with the yield on the benchmark 2026 paper adding 9.4 basis points to 8.57 percent. (Reporting by Mfuneko Toyana and Zimasa Mpenyama, editing by Larry King)