JOHANNESBURG: South Africa’s rand was little changed in early trade on Monday, with Wednesday’s mid-term budget the main focal point for investors this week.
At 0720 GMT the rand traded at 17.67 against the U.S. dollar , not far from its previous close of 17.6725. The dollar was also broadly flat against a basket of global currencies.
The finance minister’s medium term budget policy statement in parliament on Wednesday gives an update on the health of public finances midway through the fiscal year. It will be the first “mini budget” under the coalition government formed in June.
A Reuters poll of economists published last week predicted the finance minister will announce a lower 2024/25 budget deficit estimate than was given in February’s main budget, but fiscal challenges are expected to slow consolidation efforts next year.
South African rand softer; focus on mid-term budget next week
“Although this is not a policy-setting event, any indication of credible fiscal reforms would support market confidence and the rand,” Andre Cilliers, currency strategist at TreasuryONE, said in a note.
Other domestic data releases this week include September credit extension and money supply data on Tuesday, September producer inflation and trade balance data on Thursday, and October vehicle sales figures on Friday.
South Africa’s benchmark 2030 government bond was softer in early deals, with the yield up 3 basis points to 9.315%.
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