Rand firmer ahead of budget speech

The rand was firmer against the dollar in early trade on Wednesday ahead of Gordhan's budget statement.

Johannesburg - South Africa's rand was firmer against the dollar in early trade on Wednesday ahead of Finance Minister Pravin Gordhan's unveiling of the medium-term budget policy statement.

At 6h55 the rand was trading at 13.6900/dlr, 0.5 percent firmer than the previous day's close.

Gordhan's statement, which will look at government spending priorities for the next the years, is meant to boost investor confidence and show his looming fraud case is not distracting him.

“We expect today's budget will be rand supportive ... With local elections out of the way, the budget has no populist tones to strike but National Treasury will need to tightly hold to the expenditure ceiling and allude to progress on reforms given the political uncertainty and rating pressure,” said Rand Merchant Bank currency strategist John Cairns in a morning note.

In fixed income, the yield for the benchmark government bond due in 2026 was down 5.5 basis points at 8.735 percent.

Stocks opened lower in line with global peers, with benchmark Top-40 index down 0.83 percent to 44 828.

Reuters