Sense of unease and anxiety ahead of the Budget hits the rand

JOHANNESBURG – The rand  backtracked 0.43 percent against the dollar to R15.20 by 5pm on Tuesday as the market awaited Finance Minister Tito Mboweni’s balancing act in his Budget speech today, and whether he would do enough to stave off a potential downgrade by Moody’s.

The rand retracted against every G10 currency as a sense of unease and anxiety mounted ahead of the Budget.

Analysts said the speech would provide guidance on whether the government had been able to rein in spending and introduce fundamental macroeconomic reforms that could revive the country’s economy.

FXTM senior research analyst Lukman Otunuga said the question on investors’ minds was whether Mboweni would be able to convince Moody’s that he had a reliable plan to stabilise government debt.

“Whatever the outcome of the Budget speech, it will certainly have a lasting impact on the South African rand and the country’s economic outlook,” Otunuga said.