The South African rand on Tuesday slipped to its lowest level this year, with investors awaiting the finance minister’s budget speech due on Wednesday that is likely to provide cues on the government’s policy trajectory.
At 1524 GMT, the rand traded at 18.2875 per dollar, about 1.04% weaker than its previous close, after earlier hitting its lowest level for 2023 of 18.3225.
The dollar was up about 0.13% at 104.04 against a basket of global currencies , trading near a six-week high it reached on Friday.
Finance Minister Enoch Godongwana will deliver his 2023 budget speech on Wednesday. Apart from presenting updated revenue, expenditure and economic growth forecasts, he is expected to outline a plan for the government to take on part of the debt of struggling state power utility Eskom.
“The ZAR is poised for a big move in either direction tomorrow,” said ETM Analytics in a research note.
The rand is on the defensive as one of the worst-performing emerging market currencies this year and is susceptible to any bad news, it said.
Also this week, global watchdog the Financial Action Task Force (FATF), which sets standards on combating money laundering and illicit financing, could add South Africa to its “grey list” at meetings in Paris, which could hurt local asset prices.
Shares on the Johannesburg Stock Exchange fell, weighed down by Sibanye Stillwater Ltd (SSWJ.J) and Sasol Ltd (SOLJ.J), which both ended over 5% lower. Sibanye said it expected its annual profit to have slumped by as much as 51%, while mixed half-year results by Sasol failed to impress investors.
The government’s benchmark 2030 bond was lower, with the yield up 6.5 basis points at 10.255%.
Source : Reuters