The South African rand gained some ground on Wednesday morning as investors looked ahead to a crucial meeting by the country’s finance committee, which is expected to shape the fate of the long-delayed national budget.
By 9:30 CAT, the local currency was trading at 17.81 against the US dollar, reflecting a modest 0.2% improvement compared to its position at the close of trading on Tuesday.
Attention is now fixed on the Standing Committee on Finance, which began its session at 8:00 GMT to review a key legislative document linked to the budget.
The committee is expected to issue a recommendation—either urging lawmakers to accept the proposed fiscal framework and revenue measures or advising that the document be returned to the National Treasury for revisions.
Originally scheduled for release in February, the budget has gone through two major overhauls due to internal disagreements within the ruling coalition.
The delays have largely stemmed from disputes over controversial plans to increase taxes, which faced resistance from within the government itself.
The third and latest version of the budget, introduced by Finance Minister Enoch Godongwana in May, appears more likely to win approval.
This follows a shift in stance from a coalition partner that had previously rejected earlier versions but now seems prepared to support the revised framework.
Meanwhile, fresh economic data released on Wednesday offered a mixed picture of the country’s economic momentum.
A new purchasing managers’ index showed that business activity grew in May at its fastest pace in four years—an encouraging sign for the private sector.
However, this came just a day after figures showed that South Africa’s economy stalled in the first three months of the year, with no growth recorded for the first quarter.
While the upbeat PMI report signals a potential rebound, concerns linger about the country’s overall economic trajectory.
In the bond market, investor sentiment remained cautiously positive. The yield on the benchmark 2035 government bond dipped slightly, falling by 2.5 basis points to 10.085%, suggesting modest buying interest from traders.
