Rand slips as investors await annual budget

The rand weakened in early trade on Wednesday before the government’s annual budget presentation later in the day.

At 0700 GMT, the rand was trading 0.3% weaker at R14.58 per dollar. It had ended at R14.57 against the dollar on Tuesday, stronger than its previous close.

Finance Minister Tito Mboweni is expected to present the budget at 1200 GMT and investors and traders are looking for clear-cut strategies to boost growth and cut debt.

Tax collections in December were better than expected, led by a profit windfall from mining companies even though the rest of the economy has been badly battered by the coronavirus.

But analysts say higher tax collection should not prompt a spending spree by the Finance Minister at a time when the fiscal deficit to gross domestic product is likely to double from last year’s level when the country was already in recession.