CAPE TOWN – The rand was trading cautiously on Tuesday in a tight R14.31-to-R14.44 range to the dollar with the market eagerly awaiting Finance Minister Tito Mboweni’s Medium-term Budget Policy Statement (MTBPS).
TreasuryONE senior currency dealer Andre Botha said this was hardly surprising “as the market holds its collective breath before the MTBPS and the release of the South African inflation data tomorrow”.
The domestic currency later gave up some of its resellience to a 5pm bid price of R14.43, which was 15c weaker than Friday’s same time bid. Against the pound the rand was 20c softer at R18.72 and to the euro the currency eased 16c to R16.53.
Botha said it will be interesting to see how the MTPBS pans out, with huge two-way risk depending on the tone of the speech. “The way the Rand has traded gives a distinct impression that the market is uncertain on which way to lean and is sitting on their hands until the speech.”
The Finance Minister will deliver what is arguably the most difficult MTBPS of the democratic era on Wednesday with a VAT hike, increased fuel prices and real cuts in key social spending areas – including education, human settlements and health care – were announced in the February 2018 budget.
JSE stocks took quite a pounding with 117 stocks closing higher, 112 closing lower and 199 unchanged. The blue-chip Top40 index declined 2.23 percent to 45 007.50 points, while the broader all share index gave up 1.98 percent to 51 168.50 points.
BUSINESS REPORT ONLINE