JOHANNESBURG: South Africa’s rand was stable on Friday after a volatile week in which it weakened over the last-minute postponement of the national budget but then recovered thanks to buoyant global gold price.
At 1508 GMT, the rand traded at 18.32 against the dollar, near its previous close of 18.3225.
The national budget was delayed on Wednesday due to disagreements within the country’s coalition government over a proposal to hike value-added tax.
Analysts said the postponement, the first in the country’s post-apartheid history, meant weeks of uncertainty before a new budget is presented in mid-March.
The delay “highlights the risk that this grand coalition is an experiment that can go wrong at any time,” Commerzbank analyst Volkmar Baur said in a research note.
South African rand partially recoups losses, with focus on G20 meeting
Andre Cilliers, a currency strategist at TreasuryONE, said markets would be looking to see whether the revised budget focuses on debt consolidation and expenditure cuts. If it does, the rand could strengthen, he said in another note.
Prices of gold, a major South African export, were on track for an eighth week of gains.
On the stock market, the Top-40 index was little changed.
South Africa’s benchmark 2030 government bond was stronger, with the yield down 3.5 basis points at 9.155%.
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