The rand was under pressure against the dollar on Monday as investors’ risk appetite remained tentative across the globe despite a rescue deal for debt-ridden Greece.
Traders and analysts predicted a potentially volatile week for the rand, with the release of domestic GPD and trade data as well as Finance Minister Nhlanhla Nene’s budget speech on Wednesday.
At 0655 GMT, the local unit was trading 0.31% softer at R11.64 to the dollar after ending Friday’s session at R11.61. In fixed income, the yield on the benchmark government bond maturing in 2026 was flat at 7.655 %.
South Africa has grappled with persistent shortfalls on its budget and current account since emerging from a 2009 recession
The market was eager to see how Nene proposes to boost revenue, given anaemic economic growth in Africa’s most advanced economy, traders and analysts said.
“Financial markets will no doubt remain on tenterhooks in the run up to the announcement given the further deterioration in economic conditions since National Treasury’s October update,” said BNP Paribas Cadiz Securities analyst Jeffrey Schultz.
South Africa has grappled with persistent shortfalls on its budget and current account since emerging from a 2009 recession, and this helped weaken the rand nearly 10% last year. Greece’s government prepared reform measures on Sunday to secure a financial lifeline from the euro zone.
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