South African rand steady as investors digest budget, await producer inflation
The South African rand was steady in early trade on Thursday as investors digested the annual budget, which analysts said underscored the government's commitment to restoring fiscal sustainability.
At 0656 GMT the rand traded at 15.8675 against the dollar, little changed from its previous close of 15.8725
The government said in its annual budget on Wednesday that it would propose a "principles-led" fiscal anchor later this year, rather than a numerical target, as part of efforts to restore the health of public finances.
"The key theme around (Finance Minister) Enoch Godongwana's budget speech was 'fiscal anchor'. That description certainly resonated with operators and investors. The ZAR appreciated to 15.83, although towards the close importers pushed it a minuscule weaker," said Adam Phillips, treasury specialist at Umkhulu Treasury.
Domestically focused investors will turn their attention to Statistics South Africa's January domestic producer inflation figures at 0930 GMT, with analysts polled by Reuters expecting it to come in at 2.5%.
"Our PPI forecast shows producer inflation easing slightly from 2.9% in December to 2.8% in January. The downward pressure mainly stems from the 'coke and petroleum products' subcategory. Within this category, the downforce will emanate from fuel prices," Nedbank economists said in a research note.
Other economic indicators due this week include money supply, private sector credit, trade balance and budget balance figures on Friday.
South Africa's benchmark 2035 government bond was firmer in early deals, as the yield fell 3 basis points to 7.775%.
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