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Cape Town - The rand took a dive after Finance Minister Malusi Gigaba presented his maiden budget statement.

South Africa has slashed its projected gross domestic product (GDP) growth forecast for 2017 by almost half, from 1.3% forecast in the February budget to 0.7%, as a result of continued decline in business and consumer confidence that has gathered pace since 2014.

Prior to the start of the of the speech the rand to dollar was at 13.74. The rand stands now 13. 93.

The rand to pound stood at 18.26 before the speech, it now trades at 18.45

The rand to euro rate stood at 16.25 before the speech, it now trades at 16.38

Gigaba's speech has yet to end. 

According to the 2017 Medium-Term Budget Policy Statement (MTBPS), revisions to the forecast reflected a significant deterioration in business and consumer confidence over the past year.

Finance Minister Malusi Gigaba presented the MTBPS in Parliament on Wednesday to set out the fiscal policy objectives and government's spending priorities over the three-year expenditure period.

The MTBPS said that policy and political uncertainty - coupled with weak confidence, discouraged investment and consumption - remained central risks to the domestic economic outlook. 

READ MORE: WATCH LIVE: Gigaba delivers #MTBS2017 in Parliament

CDS

Reuters reports the cost of insuring exposure to South African debt rose to the highest since October 2 after the country’s budget deficit forecast was widened by the government to an eight-year high.

Five-year credit default swaps (CDS) for South Africa rose 6 basis points (bps) from 182 bps, data from IHS Markit data showed.

The 4.3% deficit forecast was wider than economists had expected. South Africa’s Treasury also halved its economic growth forecast for 2017 to 0.7 percent and said annual growth would remain below 2 percent for the next three years.

-AFRICAN NEWS AGENCY, REUTERS