JOHANNESBURG: South Africa's rand was on a firmer footing against the dollar on Thursday as the market digested the previous day's well-received interim budget in which the government lowered its budget deficit forecast for the 2013/14 fiscal year.
The rand was at 9.7650 to the dollar at 0624 GMT, up nearly 0.4 percent from Wednesday's close in New York.
Besides revising the 2013/14 budget deficit forecast to 4.2 percent of GDP from the 4.6 percent seen in February, the Treasury on Wednesday cut 2013 growth expectations to 2.1 percent of GDP from 2.7 percent forecast in February.
Analysts said the budget lacked bold ideas to spur growth in Africa's biggest economy and noted that national debt will continue to rise.
"We are more concerned about the likely upward trajectory in the debt-to-GDP ratio over the medium term, than assured by the lower-than-expected deficit projection for the current fiscal year," Absa Capital analysts wrote in a note.
The yield on the 2026 government bond was little changed at 7.7 percent while that on the 2015 paper dropped 7 basis points to 5.7 percent.
Comments
Comments are closed.