x

South Africa’s rand on the backfoot after lukewarm budget

South Africa’s rand traded slightly weaker on Thursday, a day after the finance minister announced a partial bailout for ailing power utility Eskom in an annual budget reflecting sluggish growth while deficits and debt widened.

At 0630 GMT, the rand was 0.3 per cent weaker at 14.0362 per dollar after closing at 14.03 overnight in a busy session that included the release of local inflation and the much-watched minutes of the Federal Reserve.

The rand initially swung weaker as Finance Minister, Tito Mboweni, revealed 69 billion rand (4.92 billion dollars) support for Eskom, but regained some ground as traders saw a smaller chance of a rating cut to “junk” by Moody’s.

The minister’s firm approach to Eskom’s debt and his mention of finding a strategic private partner for the transmission component once the utility has been broken into three elements can be viewed as positive from an economic point of view,” said Maarten Ackerman, chief economist at Citadel.

Moody’s warned late on Wednesday that the budget highlighted the country’s weakening fiscal position, but hinted at a reprieve when the firm makes a credit decision due at the end of next month.

Before the budget headline consumer inflation showed further slowing to 4 per cent year-on-year in January from previous 4.5 per cent, boosting the attractiveness of South African assets among yield-seeking investors.

Bonds traded weaker, with the yield on the benchmark government paper due in 2026 up 0.5 basis points to 8.875 per cent.

Hot this week

Editors Urge Government To Create Safe, Enabling Environment For Journalists

· Ask security agents to find missing Vanguard journalist As...

EXCLUSIVE: Buhari orders probe of Isa Funtua, AMCON over keystone and Etisalat

Following the controversy generated by the leading opposition party,...

6 Signs your boyfriend thinks you are ugly -Take note of No. 2

They say there are three kinds of people; the...

2023: South-East, Middle Belt Forum Endorses Peter Obi

The South-East and Middle Belt Forum has endorsed the...

Tinubu Lights Up Dakibiyu District, Commissions Connector Road CN-8 Road

By Joyce Rémi-Babayeju President Bola Ahmed Tinubu on Tuesday opened...

Wike Never Allocated Land In Abuja To Children – Aide Insists

By Joyce Remi-Babayeju Senior Special Assistant on Public Communications and...

Tinubu Extols Wike For Localizing Renewed Hope Agenda, Commissions Giri Access Road

By Joyce Remi-Babayeju President Bola Ahmed Tinubu on Monday extolled...

Gov Mutfwang Reaffirms Commitment to Business-Friendly Environment in Plateau

By Israel Adamu, Jos Governor of Plateau State, Barrister Caleb...

One Killed, Homes Razed as Family Members Clash Over Farmland in Plateau

By Israel Adamu, Jos One person has been confirmed dead...

Akume’s Alleged Resignation a Plot to Incite Religious Tension – Northern CAN

By Achadu Gabriel, Kaduna The Christian Association of Nigeria (CAN)...

Kaduna Govt Debunks Alleged 24-Hour Curfew in Kakuri

By Achadu Gabriel, Kaduna The Kaduna State Government has debunked...

Delta Govt Open to Constructive Criticism – Aniagwu

By Anne Azuka The Delta State Government has reaffirmed its...
spot_img

Related Articles

Popular Categories

spot_imgspot_img