JOHANNESBURG: The South African rand was steady in early trade on Monday, at the start of a week in which fiscal policy will be in focus, with the finance minister due to present this year’s budget. At 0645 GMT, the rand traded at 18.0500 per dollar, not far from its previous close of 18.0375.
The dollar was also little changed against a basket of global currencies.
Finance Minister Enoch Godongwana will deliver his 2023 budget speech on Wednesday.
As well as presenting updated revenue, expenditure and economic growth forecasts, he is expected to outline a plan for the government to take on part the debt of struggling state power utility Eskom.
A Reuters poll last week predicted that the consolidated budget deficit would narrow to 4.5% of gross domestic product (GDP) for the fiscal year beginning in April and to 4.4% of GDP for the following year, from 4.8% of GDP in 2022/23.
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 scheduled to happen in Paris.
South African rand slips as dollar gains on US rate hike worries
Being added to that list would be a reputational knock for South Africa and could hurt local asset prices, as grey-listed countries are subject to greater monitoring by the FATF on concern that they are at higher risk for money laundering and terrorist financing.
The government’s benchmark 2030 bond was slightly stronger in early deals, with the yield down 1.5 basis points at 10.100%.
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