The South African (SA) Rand was little changed in early trade on Wednesday as investors avoided taking large positions ahead of the mid-year budget review, which is expected to provide clues on the country’s fiscal outlook and credit-rating prospects.
The Rand traded at 16.4075 against the Dollar, a whisker away from Tuesday’s close
Finance Minister Enoch Godongwana is due to deliver the Medium-Term Budget Policy Statement.
Economists expect Godongwana to present an improved fiscal outlook, with a revenue windfall bolstering a push to regain an investment-grade credit rating.
But record-high fuel prices, weak economic growth and pressure to spend ahead of November 4 local government elections could limit how much of the windfall the Treasury saves.
Statistics SA is set to release consumer inflation and retail sales on Wednesday, providing a snapshot of price pressures and consumer demand in Africa’s largest economy as the Middle East conflict keeps fuel costs elevated.
Economists polled by Reuters expect headline inflation to accelerate to 4.7% in September from 4.4% in August, while annual retail sales growth is forecast to edge up to 3.5% in August from 3.4% in July.
Investec forecasts inflation at 4.6%, while Nedbank expects a reading of 4.8%, citing higher transport costs driven by rising fuel prices and rand weakness.
The Rand fell more than 2% against the Dollar in September.
SA’s benchmark 2035 government bond was flat in early deals, with the yield at 8.735%.
–Reuters–
