South African rand weakens as traders cautious ahead of budget

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South African rand weakens as traders cautious ahead of budget

10:32 CAT | 20 Feb 2024

File photo: Reuters

The South African rand slipped on Tuesday, as traders refrained from making big bets ahead of domestic inflation figures and the finance minister’s budget speech this week.

As of 0620 GMT, the rand traded at 19.0000 against the dollar , over 0.2% weaker than its previous close.

A leading business cycle indicator (ZALEAD=ECI), opens new tab and unemployment (ZAUNR=ECI), opens new tab data will be released later in the day, and both tend to have limited impact on the market.

Economists predict Finance Minister Enoch Godongwana’s budget on Wednesday to show some slippage from last year’s mid-term budget, with weaker mining tax receipts contributing to wider budget deficits, a Reuters poll published last week showed.

Analysts forecast that Wednesday’s inflation numbers will show a slight increase to 5.4% year-on-year in January (ZACPIY=ECI), opens new tab from 5.1% in the prior month. The central bank has said it wants to see a clearer disinflation trend before cutting interest rates.

Source: Reuters