JOHANNESBURG: The South African rand weakened early on Thursday as investors focussed on President Cyril Ramaphosa’s national address for clarity on the country’s economic and political policies.
At 0641 GMT, the rand traded at 18.5925 against the dollar , about 0.3% weaker than its previous close.
Ramaphosa will deliver around 1700 GMT the annual State of the Nation Address (SONA), the first under his coalition government, which will provide investors some clarity on economic reforms and the country’s approach to structural challenges.
Although SONA has traditionally not been a market-moving event, this address could be different, analysts said.
A highlight may be the economic reforms underway, which are key to removing the country from the Financial Action Task Force’s greylist and stabilising the fiscus.
South African rand firms ahead of president’s address
U.S. President Donald Trump said on Sunday, without citing evidence, that “South Africa is confiscating land” and “certain classes of people” were being treated “very badly”. He said he would cut funding until the matter was investigated.
ETM Analytics said in a research note that Ramaphosa will want to use the opportunity of SONA to paint the country’s future efforts in a better light.
“This SONA will, therefore, be the main event of the day and capture the bulk of the market’s attention through the afternoon and evening as it receives more and more coverage,” the note added.
South Africa’s benchmark 2030 government bond was weaker in early deals, with the yield up 1.5 basis points at 9.06%.
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