South African rand steady before mid-year budget review

JOHANNESBURG: The South African rand was stable in early trade on Wednesday, before a mid-year review of public finances that is widely expected to contain positive news for investors.

At 0540 GMT the rand traded at 17.1500 against the dollar , within touching distance of its previous close of 17.1525.

Finance Minister Enoch Godongwana will start his mid-year budget review around 1200 GMT.
Economists expect Godongwana to present a healthier fiscal picture than at the main budget in May thanks to stronger revenue collection, though the government’s economic growth projections could be revised down.

“Overall … we expect the news to be positive for the fiscal path,” Razia Khan, Standard Chartered’s head of research for Africa and Middle East, said in a note.

Financial markets will be watching what Godongwana says about the country’s inflation target, which he sets but the central bank has been pushing for him to lower.

The central bank’s preference for a lower target has lifted the rand and government bonds this year.