JOHANNESBURG – The rand fell more than 1 percent and bonds slid on Wednesday after Finance Minister Tito Mboweni delivered a medium term budget with wider deficit estimates and lower growth forecasts.
At 5pm, the rand was bid at 14.51 to the greenback, 7c weaker on the day.
Government bonds were also weaker, with the yield on the benchmark instrument due in 2026 up 6.5 basis points at 9.23 percent.
Mboweni earlier delivered a bleak maiden budget, raising the deficit estimate for the 2018/19 fiscal year to 4 percent of gross domestic product (GDP), while halving the growth forecast for this year to 0.7 percent.
“The budget deficit erased the confidence of the market and the rand sold off quite sharply. The rand remains on the defensive,” said ETM economist Halen Bothma.