Rand slips as investors wait for another revised budget
The South African rand weakened slightly in early trade on Tuesday as investors waited for the finance minister to say when he will present another revised national budget.
Finance Minister Enoch Godongwana has to make further adjustments after scrapping a contentious hike in value-added tax (VAT) that was fiercely opposed across the political spectrum.
The high court on Sunday issued an order suspending the VAT hike and setting aside the adoption of the fiscal framework, paving the way for Godongwana to table new budget instruments in parliament.
At 0741 GMT, the rand traded at 18.57 against the dollar, down 0.43% on its previous close.
Wrangling over the 2025 budget has been the biggest test yet of the Government of National Unity coalition formed last year when the African National Congress lost its parliamentary majority in an election.
Godongwana initially proposed a two percentage-point hike in VAT in a February budget that was postponed at the last minute because of disagreements in the coalition.
He watered that down to a one point VAT increase spread over two years in an amended March budget, but most political parties continued to reject the plan and last week Godongwana caved to pressure to withdraw it.
No major domestic economic data releases are expected on Tuesday, but on Wednesday March credit extension, budget and trade figures are scheduled for release.
The benchmark 2030 government bond was marginally stronger in early deals, as the yield fell 5 basis points to 8.815%.
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