Rand firms as deficit fears ease

South Africa’s rand firmed early on Friday, bucking a downtrend among its emerging market peers, as concerns about South Africa’s budget eased slightly.

At 0645 GMT the rand was 0.38% firmer at 15.18 per dollar, moving further away from 11-month lows above 15.50.

Gains were spurred by the National Treasury’s promise to cut costs and keep spending down.

Read: South Africa to seek budget spending cuts as debt climbs

Rating agency Moody’s welcomed the move, saying the government would likely absorb extra financial support for Eskom with new revenue and expenditure measures in October’s budget review, with departmental cuts an option.

South Africa risks breaching self-imposed fiscal ceilings after granting the deeply indebted utility an extra R230 billion in emergency funds.