South Africa rand weaker as budget risk raises second wave Covid-19 fears
South Africa's rand weakened early on Monday, reflecting the gloom in global markets as fears of a second wave of coronavirus infections around the world increased investor jitters ahead of a local emergency budget later this week.
At 0700 GMT the rand was 0.49% weaker at 17.4050 per dollar from Friday's 17.3200 close, with the sell-trend that took root last week, pushing the currency to its lowest in June, set to continue until at least Wednesday's budget.
Bonds also took a hit, with the yield on the government issue due in 2030 up 9.5 basis points at 9.315%.
Finance Minister Tito Mboweni is expected to paint a bleak picture in a revised budget that comes almost three months after government announced a R500-billion ($28.78-billion) stimulus package leaning heavily on new borrowing.
The treasury said at the weekend that a $1-billion emergency loan from the New Development Bank - or BRICS Bank - had been approved. It was the first in a raft of financing from multilateral institutions set to push the budget deficit into double digits and debt past the 60% of GDP threshold seen before the coronavirus pandemic.
"Not only will treasury have to contend with a marked reduction in revenue due to the economic collapse, but Mr Mboweni will have to reprioritise R130-billion towards the fiscal stimulus plan (and) provide clarity on the 160 billion in saving from a reduction in the public sector wage bill," analysts at NKC African Economists said in a note.
Global events also did little for sentiment towards risk-sensitive assets like the rand. Global Covid-19 cases rose past 8.8 -illion while a border dispute in the Himalayas between nuclear powers China and India in which at least 40 soldiers died also unnerved investors.
Article Enquiry
Email Article
Save Article
Feedback
To advertise email advertising@creamermedia.co.za or click here
Comments
Research Reports
Latest Multimedia
Showroom
Supplier & Distributor of the Widest Range of Accurate & Easy-to-Use Alcohol Breathalysers
VISIT SHOWROOM
ECG provides specialised electrical engineering services to the Mining, Utilities, Materials Handling and Industrial industries, with extensive and...
VISIT SHOWROOM
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
