South African rand extends slide ahead of data-filled week

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South African rand extends slide ahead of data-filled week

7:09 CAT | 27 Feb 2024

File photo: Reuters

South Africa’s rand continued its downward slide for another session on Monday, with analysts citing the negative impact of the 2024 national budget on investor sentiment.

At 1602 GMT, the rand traded at 19.3225 against the dollar ZAR=D3, 0.16% weaker than its previous close.

The currency also weakened on Thursday and on Friday as the market digested the finance minister’s budget speech last week.

In it, the minister said the government would draw down 150 billion rand ($7.76 billion) from contingency reserves at the central bank over the next three years to limit rising debt, but offered little in the way of broad structural reforms.

“The negative mood post the budget speech persists and the risk for further weakness in the short term remains,” Andre Cilliers, currency strategist at TreasuryONE, said in a note.

This week, investors will be monitoring trade ZATBAL=ECI and budget balance data ZABUDM=ECI, producer inflation ZAPPIY=ECI and private sector credit ZACRED=ECI figures.

On the stock market, the Top-40 .JTOPI and the broader all-share .JALSH indexes closed around 0.8% lower.

Shares in Sasol SOLJ.J fell 2% after the petrochemical firm reported a decline inhalf-year profit.

South Africa’s benchmark 2030 government bond ZAR2030= was weaker, with the yield rising10.5 basis points to 10.240%.

($1 = 19.3213 rand)

Source: Reuters