JOHANNESBURG: South Africa’s rand steadied against the dollar early on Monday after slumping in the previous session as political uncertainty unnerved investors, with market focus this week shifting to Finance Minister Malusi Gigaba’s budget speech. At 0645 GMT, the rand traded at 13.6650 per dollar, little changed from its New York close of 13.6550 on Friday.
South Africa’s rand weakened sharply on Friday, hitting its weakest since Oct. 10, as speculation that President Jacob Zuma may axe his deputy Cyril Ramaphosa added to a climate of political uncertainty. Gigaba will deliver his first medium-term budget policy statement in Parliament on Wednesday. A Reuters poll found poor tax receipts could push the 2017/18 budget deficit forecast to 3.9 percent of GDP from an estimate of 3.1 percent in February. “We expect a terrible budget on Wednesday — simply put, there are no more rabbits to pull out of the hat,” Rand Merchant Bank analysts John Cairns and Isaah Mhlanga wrote in a note. Stocks were set to open higher at 0700 GMT, with the JSE securities exchange’s Top-40 futures index up 0.24 percent. In fixed income, the yield for the benchmark government bond was down 1 basis point to 8.825 percent.