South African rand near five-month high before budget, Trump meeting

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South African rand near five-month high before budget, Trump meeting

6:07 CAT | 21 May 2025

File photo: Reuters

The South African rand traded near a five-month high early on Wednesday, hours before the finance minister was due to present a new budget and President Cyril Ramaphosa was set to meet U.S. President Donald Trump to try to improve relations.

At 0650 GMT the rand traded at 17.9525 against the dollar, down 0.2% on the day, but close to its strongest level since mid-December.

Finance Minister Enoch Godongwana will present a third version of the national budget from 1200 GMT, after disagreements between coalition partners scuppered two previous versions.

Investors are watching to see how Godongwana will plug a 75 billion rand revenue hole created by his decision to backtrack on raising value-added tax and whether he will announce a lower inflation target.

Ramaphosa will meet Trump in Washington from about 1530 GMT, according to South Africa’s public broadcaster SABC, to try to reset ties strained by Trump’s repeated criticism of South Africa.

Since returning to the White House in January, Trump has cut all financial aid to South Africa, expelled its ambassador and granted about 50 white South Africans refugee status having deemed them victims of racial discrimination, albeit without providing evidence.

South Africa’s statistics agency will also release April inflation data and March retail sales on Wednesday.

The benchmark 2030 government bond was little changed in early deals, with the yield up 1 basis point at 8.87%

Source: Reuters