JOHANNESBURG - The rand was little changed early on Wednesday, as investor caution reigned ahead of a closely watched budget speech by the country’s finance minister.
At 10:00 local time, the rand traded at 14.24 versus the dollar, the rand closed of 14.2625 on Tuesday.
Recently appointed Finance Minister Tito Mboweni is expected to announce revised budget deficit targets and growth forecasts, as well as measures to boost the economy and shore up struggling state-owned companies.
The tone of his medium-term budget speech will influence whether Moody’s strips South Africa of its last investment grade credit rating at a review expected after the speech.
“South Africa’s new finance minister will probably announce further fiscal tightening,” John Ashbourne at Capital Economics said in a note.
“This will likely placate ratings agencies, but supports our view that economic growth will remain weak.”
Government bonds were slightly stronger in early deals, with the yield on the benchmark instrument due in 2026 down 4 basis points to 9.125 percent.
Minister Mboweni seemed to be burning the midnight oil and tweeted at 12:39 "MTBPS= Medium Term Budget Policy Statement. Cool?"
MTBPS= Medium Term Budget Policy Statement. Cool?
The minister also said that he would acknowledge people who gave Tips For Tito on Twitter.
On Wednesday, October 24, 2018, MTBPS day, I will acknowledge ALL those who gave Tips For Tito on Twitter. Great contributions! Thank you! God bless you. God bless South Africa! God bless Africa! 💪🏿💪🏿
National Treasury and SARS officials hard at work, finalizing the MTBPS Speech with Minister of Finance @tito_mboweni and Deputy Minister Mondli Gungubele. Speech will be delivered on 24 October 2018. #MTBPS2018 pic.twitter.com/iX60XV7lxs