off-the-wire

South African rand steady ahead of budget speech

Kitco Media
By Reuters
Published:
Updated:
Reuters
JOHANNESBURG, Feb 22 (Reuters) - South Africa's rand was flat early on Wednesday, with its direction during the day likely to depend on the outcome of a speech on the 2023 budget, analysts said. At 0643 GMT, the rand traded at 18.2475 per dollar, the same as its previous close. On Tuesday it hit its lowest level so far this year at 18.3225. Finance Minister Enoch Godongwana will deliver his budget speech at 1400 local time (1200 GMT). Investors will be watching closely for pointers to the government's policy trajectory.


The focus will be on the state's approach to South Africa's power crisis. Hours of daily power cuts have crippled businesses in Africa's most industrialised economy and weakened growth prospects for this year and next.


Godongwana is expected to outline a plan for the government to take on part of the debt of struggling state power utility Eskom. He will also present updated revenue, expenditure and economic growth forecasts. "The potential for a relief rally exists if the plans around Eskom are fiscally sensitive, prudent and credible," said ETM Analytics in a research note. But the rand is on the defensive and Godongwana faces a tough task of restoring confidence in the economy, it said.


The government's benchmark 2030 bond was slightly weaker in early deals, with the yield up 0.5 basis points at 10.260%. (Reporting by Nellie Peyton; editing by John Stonestreet)

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