The rand inched lower on Wednesday as the postponement of the country’s budget and the stalemate over a United State stimulus package kept bids subdued.
At 1500 GMT the rand was 0.17% weaker at R16.50 per dollar, having slipped to a session-low of R16.58 after the late-night news that Finance Minister Tito Mboweni had asked for the tabling of the Medium Term Budget Policy Statement (MTBPS) to be delayed by a week.
Mboweni pointed to “implications of the time frames for the finalisation of the government’s Economic Reconstruction and Recovery plan on the budget process as reasons necessitating the proposed rescheduling”.
The postponement comes after advisors to President Cyril Ramaphosa said government plans to curb rising debt were too ambitious, and ahead of his announcement of a much-anticipated economic recovery plan in parliament on Thursday.
“It’s likely budget allocations and debt projections are the sticking point, both for negotiations pre-MTBPS with stakeholders, and also the consideration of the likely impact on markets, with recent reports that debt could elevate to 100% before peaking,” said Investec’s Annabel Bishop.
Fading hopes of US Republicans and Democrats reaching a compromise on a new round of fiscal stimulus also cooled risk demand.
Bonds weakened, with the yield on benchmark government paper due in 2030 up 0.2 basis point to 9.435%.
Stocks rose, led by gold index shares which were up 3.32% as the bullion price rose amid uncertainties surrounding the US election and global economic recovery.
The benchmark All-Share index rose 0.67% to end at 55,425 points, while the FTSE/JSE Top 40 companies index closed 0.63% higher at 51,042 points.
Gold Fields gained 3.84% to R214.37, while Harmony Gold climbed 3.36% to R98.50.