JOHANNESBURG - The Medium Term Policy Statement, often termed the “mini-budget”, delivered yesterday by brand new Finance Minister Tito Mboweni can literally be described as “mini”, with the entire budget portion of the speech lasting a mere three minutes according to Bianca Botes the Corporate Treasury Manager at Peregrine Treasury Solutions
The rand weakened in light of the MTBPS and less than what Botes originally anticipated. By this morning’s opening, the rand had slumped to R14.56/$, from the week’s earlier high of R14.19.
While some important elements were highlighted in the MTBPS, the key focus for us remains on what government has to do to remain afloat, while South Africa continues to suffer from low growth, high unemployment and a wide deficit.
The CPI print from yesterday saw inflation remain at 4.9 percent, while the budget deficit increased to 4 percent.
Local PPI, as well as US jobless claim figures, will drive the rand during trade this afternoon.
The rand is expected to remain under pressure as the US dollar also managed to gain some ground in overnight trade as poor Wall Street performance and weak Eurozone data bolstered the greenback.
The rand can be expected to lean towards testing R14.68 with a range of R14.50 to R14.68 today.
South African bourse
The JSE All Share (-0.6 percent) trade weaker yesterday dragged by losses in large industrial (-1.4 percent) and mining (-0.9 percent) shares. In the overall emerging market sphere, the MSCI Emerging Market Index (-0.8 percent) traded lower. In local news, mining shares were under pressure across the board with Sibanye (-5 percent), Kumba (-3.2 percent) and Anglo American Platinum (-2.8 percent) all trading lower.
Brent crude oil
The Brent oil price dipped at first but inched higher as focus returned to US sanctions against Iran. At the close of local trade, the Brent oil price quoted 0.1 percent lower at $76.67/pb. Crude prices traded lower during Asian trade this morning.