JOHANNESBURG (Reuters) -The South African rand slipped on Wednesday as a keenly awaited budget speech by the finance minister failed to impress investors.
At 1551 GMT, the rand traded at 17.6825 against the U.S. dollar, down about 0.2% from its previous close.
South Africa’s government on Wednesday forecast wider budget deficits and higher debt over the next three years even as growth prospects improved due to better electricity supply.
The mid-term budget was 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 fuelling a rally in the rand and local currency debt.
“The fiscal path set out in the MTBPS (medium-term budget policy statement) probably fell short of the market’s relatively upbeat expectations,” said Nedbank analysts in a research note.
Economists polled by Reuters had predicted Finance Minister Enoch Godongwana will announce a lower 2024/25 budget deficit estimate than in February’s main budget.
In the stock market, the Top-40 index closed 0.61% lower.
South Africa’s benchmark 2030 government bond fell marginally, as the yield rose 1.5 basis points to 9.285%.
(Reporting by Alexander Winning and Bhargav Acharya; Editing by Savio D’Souza and Richard Chang)
