SA rand, government bonds weaken over budget jitters
South Africa's rand weakened on Monday and traders were expecting the currency to remain under pressure
JOHANNESBURG - South Africa's rand weakened on Monday and traders were expecting the currency to remain under pressure as investors awaited a slew of key economic data later in the week for direction.
At 15:05 GMT the rand was trading 0,33 percent weaker at 11,6500 to the dollar compared with its Friday closing level of 11,6120.
The currency traded 0,42 percent softer to the euro at 13,1923.
"The rand remains under pressure because the situation locally on the GDP side is not looking very rosy against the background of what the [South Africa Revenue Service] may bring to the table in the next few days in terms of taxation," said Cheslyn Francis, a portfolio manager at Afrifocus Securities."
"The market is apprehensive in terms of what is coming from the budget."
Statistics South Africa will release gross domestic product (GDP) data for the fourth quarter of 2014 on Tuesday. Finance Minister Nhlanhla Nene presents the national budget to parliament on Wednesday, where new tax measures could be announced. Trade data will be released on Friday.
The market was eager to see how Nene proposes to boost revenue, given anaemic economic growth in Africa's most advanced economy.
South Africa has grappled with persistent shortfalls on its budget and current account since emerging from a 2009 recession, and this helped weaken the rand nearly 10 percent last year.
In fixed income, the yield on the benchmark government bond maturing in 2026 was up 2,5 basis points to 7,68 percent.