South Africa’s rand firmed against the U.S. dollar in early trade on Monday, as investors awaited the new finance minister’s Mid-Term Budget Policy Statement and consumer price inflation numbers due in the week.
At 0634 GMT, the rand traded at 14.3425 per dollar, 0.4% firmer than its close on Friday.
Market focus is on Wednesday’s budget speech by new Finance Minister Tito Mboweni and the September CPI data.
Africa’s most industrialised economy unexpectedly entered recession in the second quarter, but Mboweni is expected to stick closely to previous budget balance forecasts for the coming two financial years, economists predicted in a Reuters poll last week.
“Having taken up the mantle just over two weeks ago, Minister Mboweni is faced with the almighty task of having to balance populism with pragmatism as he outlines Treasury’s spending priorities for the next three years,” Rand Merchant Bank analyst Nema Ramkhelawan-Bhana said in a note.
“He is likely to sound all the right notes for ratings agencies by proposing cost-containment measures and further expenditure cuts, thereby reaffirming Treasury’s commitment to fiscal consolidation,” Ramkhelawan-Bhana added.
In fixed income, the yield on the benchmark government bond due in 2026 was down 2 basis points to 9.19%.
