South African rand flat before mid-year budget review

The South African rand was almost unchanged against the dollar early on Wednesday, ahead of Finance Minister Enoch Godongwana’s mid-year budget review, Business Recorder reported. At 0542 GMT, it stood at 16.4075 per dollar, close to Tuesday’s finish, while the benchmark 2035 government bond was also steady, yielding 8.735%.

Investors were waiting for the Medium-Term Budget Policy Statement, due around 1200 GMT, for signals about the fiscal outlook and prospects of regaining investment-grade credit status. Economists expect stronger revenue to improve the fiscal picture, although high fuel costs, weak growth and spending demands ahead of November 4 local elections could constrain savings.

Statistics South Africa was also scheduled to publish inflation and retail sales figures. Reuters’ economist poll projected September inflation at 4.7%, up from 4.4% in August, and August retail sales growth at 3.5%, compared with 3.4% in July; the rand had lost more than 2% against the dollar in September.