Rand firmer as focus turns to budget announcement

The rand was firmer on Friday morning, with focus now turning to the budget announcement, after President Cyril Ramaphosa delivered his state of the nation address (Sona) on Thursday.

Ramaphosa acknowledged that economic growth has stalled, causing high levels of unemployment, however, his address was once again, short on specifics and timeframes. 

“In currency market terms, the Sona has largely been a non-event, with little new coming to the fore in terms of policy and reform plans.” said Peregrine Treasury Solutions treasury partner Bianca Botes.

“We now turn our attention towards the budget later this month, waiting with bated breath for the ‘how’ and ‘when’ from finance minister Tito Mboweni”, Botes said.

At 11.18am, the rand had strengthened 0.61% to R14.8622/$, 0.61% to R16.1176/€ and 0.77% to R19.3516/£. The euro was flat at $1.0846.

So far this week, the rand has gained 0.39%, but it has lost 6.17% for the year.

Earlier, GDP data from Germany was disappointing, showing Europe’s largest economy did not grow in the fourth quarter of 2019 when compared to the third. Economists had expected 0.1% growth quarter on quarter.

Focus now shifts to the US, with retail sales data for January out later in the day.

[email protected]