Picture: Siphiwe Sibeko
Picture: Siphiwe Sibeko

Rand softer in early trade

By Reuters Time of article published Oct 21, 2015

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Johannesburg - South Africa's rand was slightly softer against the dollar on Wednesday as the market awaited the finance minister's medium-term budget statement, which analysts expect to show little change in this year's deficit forecast.

The JSE securities exchange's Top 40 futures index ticked up 0.35 percent, suggesting the local bourse would open 168 points higher at 07h00 GMT.

At 06h49 GMT, the rand was changing hands at 13.3425 versus the dollar, down 0.3 percent from Tuesday's close.

All eyes are on the budget speech, set for 12h00 GMT. Finance Minister Nhlanhla Nene is likely to target a budget deficit of 3.8 percent of gross domestic product for 2015/16, in line with his February forecast of 3.9 percent.

Analysts and investors are also keen to see whether the medium term budget policy statement (MTBPS) has any details on South Africa's proposed multi-billion rand nuclear energy programme.

“There is no chance this country can afford a deal that will cost the National Treasury almost 1 trillion rand and so it is with slightly nervous bated breath that we await the release,” Standard Bank trader Warrick Butler said.

Domestic inflation data due out at 08h00 GMT and retail sales numbers expected at 11h00 GMT might also influence the currency, traders said.

Government bonds also weakened in early trade, with the yield for 2026 benchmark debt adding 3.5 basis points to 8.305 percent.


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