The South African rand edged higher in early trading on Tuesday, rising to 17.6675 against the U.S. dollar, approximately 0.17% stronger than the previous day’s close. Investors remained cautious, refraining from making significant moves ahead of this week’s mid-term budget announcement.
Finance Minister Enoch Godongwana is scheduled to present the budget policy statement to parliament on Wednesday. This announcement is anticipated to provide crucial insights into the fiscal outlook for South Africa, the continent’s most industrialized nation. Analysts forecast that the budget may reveal a lower deficit estimate for 2024/25 compared to earlier projections, although ongoing fiscal challenges could impede consolidation efforts in the upcoming year.
Earlier today, the South African Reserve Bank published data on the M3 money supply and private sector credit for September. Credit growth decreased to 4.63% from 4.95% in August, while M3 money supply growth rose to 7.25%, up from 6.11% during the same period.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index was down about 0.3% in early trading. Meanwhile, South Africa’s benchmark 2030 government bond showed slight improvement, with yields slipping 4.5 basis points to 9.245%.