JOHANNESBURG (Reuters) – The South African rand was marginally weaker in early trade on Wednesday, ahead of a keenly-awaited budget speech by the finance minister.
At 0612 GMT, the rand traded at 17.6725 against the U.S. dollar, down 0.1% on its previous close.
The mid-term budget starts around 1200 GMT and is the first under a coalition government formed after the African National Congress party lost its majority.
The coalition government has committed to lifting economic growth and making progress with reforms, boosting investor confidence and contributing to a rally in the rand and local currency debt.
“The currency market will be watching closely for signs of such reforms and structural improvements,” Commerzbank analyst Volkmar Baur said in a note.
“Nevertheless, the fiscal situation is tight and the budget will, hence, provide an insight into the government’s priorities.”
Economists polled by Reuters predict Finance Minister Enoch Godongwana will announce a lower 2024/25 budget deficit estimate than was given in February’s main budget.
But further out Godongwana faces traditional challenges, including state companies seeking bailouts and trade unions demanding above-inflation wage hikes.
South Africa’s benchmark 2030 government bond rose slightly in early deals, as the yield fell 3.5 basis points to 9.235%.
(Reporting by Alexander Winning; Editing by Savio D’Souza)
