Rand slumps as MTBPS reflects more of the same

DURBAN – The rand came under pressure as in line with market expectations as Finance Minister Tito Mboweni laid the foundation for the financial future for South Africa.

The rand was largely weaker on the day with a 5pm bid of R16.39 to the dollar, 26c weaker than Tuesday’s 5pm bid. Against the pound the domestic unit was 21c weaker at R21.26 and 14c weaker against the euro at R19.22.

Earlier today, Mboweni delivered the Medium-term Budget Policy Statement (MTBS), which which communicates the policy goals of government, provides a macroeconomic context and the context in which the annual budget speech in February will be presented.

Bianca Botes, executive director at Peregrine Treasury Solutions said with government debt remaining elevated and economic growth remaining subdued, the market demonstrated scepticism of the minister’s optimism and the green shoots he is witnessing in the economy.

“While some good news about sourcing electricity supply from suppliers other than Eskom was reiterated, the R10.5 billion allocation to SAA to implement its business rescue plan is frowned upon.